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

Useful Information

Financial Accounting

1. Introduction to Accounting

Useful Information

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Multiple Choice

Why might you receive less cash than the face value of a loan you have borrowed?

Because the interest on the loan is always paid upfront.

Because the loan amount is reduced by the borrower's credit score.

Because the borrower is required to pay taxes before receiving the loan.

Because lenders may deduct loan origination fees or other charges from the loan proceeds.

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Verified step by step guidance

Understand the concept of loan origination fees: Loan origination fees are charges that lenders impose for processing a loan application. These fees are typically deducted from the loan proceeds before disbursing the funds to the borrower.

Recognize that other charges may also apply: In addition to origination fees, lenders may deduct other charges such as administrative fees, service fees, or prepaid interest, which reduce the amount of cash received by the borrower.

Analyze the impact on the loan proceeds: The borrower receives less cash than the face value of the loan because these fees and charges are subtracted from the total loan amount before disbursement.

Consider the accounting treatment: From a financial accounting perspective, the deducted fees are recorded as expenses or liabilities, depending on the nature of the charges, and the net loan proceeds are recorded as cash received.

Relate this to real-world scenarios: Borrowers should carefully review loan agreements to understand the fees and charges that will be deducted, as this affects the actual cash available for use and the effective cost of borrowing.