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

If Gina buys stock in a company, what does this mean from an accounting perspective?

Gina has lent money to the company as a creditor.

Gina is now responsible for the company's debts.

Gina has become a part-owner (shareholder) of the company.

Gina has purchased inventory from the company.

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Verified step by step guidance

Understand the concept of stock ownership: When an individual buys stock in a company, they are purchasing a share of ownership in that company. This makes them a shareholder.

Clarify the role of a shareholder: Shareholders are part-owners of the company and have a claim on its assets and earnings proportional to the number of shares they own.

Distinguish stock ownership from other financial relationships: Buying stock does not mean lending money to the company (as a creditor) or assuming responsibility for the company's debts. It also does not involve purchasing inventory from the company.

Explain the implications of stock ownership: Shareholders may receive dividends (a share of the company's profits) and have voting rights in corporate decisions, depending on the type of stock they own.

Summarize the correct answer: Gina has become a part-owner (shareholder) of the company by purchasing stock, which gives her certain rights and responsibilities as outlined by the company's governance structure.