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

7. Receivables and Investments

Introduction to Investments in Securities

Financial Accounting

7. Receivables and Investments

Introduction to Investments in Securities

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Multiple Choice

Which of the following statements about investing in securities is true?

Investing in securities always guarantees a positive return.

Securities are only issued by government entities.

Only corporations are allowed to invest in securities.

All investments in securities carry some level of risk.

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Verified step by step guidance

Understand the concept of investing in securities: Securities are financial instruments, such as stocks, bonds, or mutual funds, that represent ownership (equity) or a creditor relationship (debt) with an entity. They are used by individuals, corporations, and governments to raise capital or invest funds.

Clarify the first statement: 'Investing in securities always guarantees a positive return.' This is incorrect because all investments carry some level of risk, including the possibility of losing the principal amount invested.

Clarify the second statement: 'Securities are only issued by government entities.' This is incorrect because securities can be issued by corporations, governments, and other entities to raise funds.

Clarify the third statement: 'Only corporations are allowed to invest in securities.' This is incorrect because individuals, governments, and other entities can also invest in securities.

Identify the correct statement: 'All investments in securities carry some level of risk.' This is true because the value of securities can fluctuate due to market conditions, economic factors, and other risks, making it impossible to guarantee a positive return.