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

Insurance companies create a pool of funds to handle which of the following?

Gain

Loss

Safety

Risk

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Verified step by step guidance

Understand the concept of risk in financial accounting: Risk refers to the uncertainty regarding potential financial losses or adverse outcomes.

Recognize the role of insurance companies: Insurance companies collect premiums from policyholders to create a pool of funds. This pool is used to cover potential losses that may arise due to unforeseen events.

Identify the purpose of pooling funds: The primary purpose of pooling funds is to manage and mitigate risk by spreading it across a large number of policyholders.

Clarify why 'Risk' is the correct answer: Insurance companies are not focused on gains, safety, or loss directly. Their main objective is to manage risk by providing financial protection against potential losses.

Conclude the explanation: The pooling of funds allows insurance companies to ensure that they can compensate policyholders for covered losses, effectively managing the financial impact of risks.