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

A checking account entry is considered money because it:

can be used directly to make payments and settle debts

is always backed by physical cash in the vault

is recorded as a liability on the bank's balance sheet

represents a company's total assets

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Verified step by step guidance

Understand the concept of 'money' in financial accounting: Money is defined as a medium of exchange that can be used directly to make payments and settle debts. It is not necessarily tied to physical cash but must fulfill the function of liquidity and payment settlement.

Analyze the role of a checking account entry: A checking account entry represents funds that are readily accessible for transactions, such as paying bills or settling debts. This aligns with the definition of money as it can be used directly for payments.

Evaluate the statement 'is always backed by physical cash in the vault': This is incorrect because banks operate on fractional reserve banking, meaning they only keep a portion of deposits as physical cash and lend out the rest.

Consider the statement 'is recorded as a liability on the bank's balance sheet': While true, this does not define why a checking account entry is considered money. It reflects the bank's obligation to repay the depositor but does not directly relate to the usability of the funds.

Review the statement 'represents a company's total assets': This is incorrect because a checking account entry does not represent total assets; it only represents the liquid funds available in the account. The correct answer is that it can be used directly to make payments and settle debts.