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 is typically included in capital budgeting decisions?

Determining the amount of cash to keep in petty cash

Choosing a supplier for office supplies

Deciding whether to purchase new equipment for a manufacturing plant

Selecting the method for recording inventory

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Verified step by step guidance

Understand the concept of capital budgeting: Capital budgeting involves evaluating and deciding on long-term investment projects, such as purchasing equipment, constructing buildings, or launching new products. It focuses on investments that will generate returns over several years.

Analyze the options provided in the problem: Review each option to determine whether it aligns with the definition of capital budgeting. For example, petty cash management and supplier selection are operational decisions, not long-term investment decisions.

Identify the correct option: Deciding whether to purchase new equipment for a manufacturing plant is a capital budgeting decision because it involves evaluating a significant investment that impacts the company's long-term operations and financial performance.

Exclude irrelevant options: Selecting the method for recording inventory and choosing a supplier for office supplies are accounting and operational decisions, respectively, and do not fall under capital budgeting.

Conclude the reasoning: Capital budgeting decisions are strategic and focus on long-term investments, such as purchasing new equipment, which is the correct answer in this case.