Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

1. Introduction to Accounting

Types of Accounting

Financial Accounting

1. Introduction to Accounting

Types of Accounting

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Multiple Choice

Which of the following statements is correct regarding the common stock account?

The common stock account records the market value of shares outstanding.

The common stock account includes all dividends paid to shareholders.

The common stock account is classified as a liability on the balance sheet.

The common stock account represents the par value of shares issued by a corporation.

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Verified step by step guidance

Understand the concept of the common stock account: Common stock represents ownership in a corporation and is classified as part of stockholders' equity on the balance sheet. It does not record market value, dividends, or liabilities.

Clarify the term 'par value': Par value is the nominal or face value assigned to a share of stock by the corporation, often set at a minimal amount (e.g., $0.01 per share). It is used for accounting purposes and is recorded in the common stock account.

Identify the incorrect statements: The common stock account does not record the market value of shares outstanding, as market value fluctuates and is not part of the accounting records. It also does not include dividends paid to shareholders, as dividends are recorded separately in retained earnings. Additionally, common stock is not classified as a liability; it is part of equity.

Recognize the correct statement: The common stock account represents the par value of shares issued by a corporation. This is the amount recorded in the common stock account when shares are issued.

Conclude the explanation: The correct statement is that the common stock account represents the par value of shares issued by a corporation, which is part of stockholders' equity on the balance sheet.