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

As your business’s chief financial officer, which type of accounting would you primarily use to prepare financial statements for external stakeholders such as investors and creditors?

Financial accounting

Cost accounting

Tax accounting

Managerial accounting

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Verified step by step guidance

Understand the purpose of financial statements: Financial statements are prepared to provide information about the financial performance and position of a business to external stakeholders such as investors, creditors, and regulatory agencies.

Identify the type of accounting that focuses on external reporting: Financial accounting is specifically designed to prepare reports and statements for external stakeholders, adhering to standardized principles such as GAAP (Generally Accepted Accounting Principles) or IFRS (International Financial Reporting Standards).

Differentiate financial accounting from other types of accounting: Cost accounting focuses on internal cost management, tax accounting deals with compliance and tax-related matters, and managerial accounting is used for internal decision-making. None of these are primarily intended for external reporting.

Recognize the role of the chief financial officer (CFO): As the CFO, your responsibility includes ensuring accurate and compliant financial reporting to external stakeholders, which is achieved through financial accounting.

Conclude that financial accounting is the correct type of accounting to use for preparing financial statements for external stakeholders, as it aligns with the needs of investors and creditors.