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

The amount of money paid into a company by its owners is referred to as:

Accounts payable

Retained earnings

Owner's equity

Revenue

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Verified step by step guidance

Understand the concept of Owner's Equity: Owner's equity represents the amount of money invested into the company by its owners, along with any retained earnings. It is a key component of the accounting equation: Assets = Liabilities + Owner's Equity.

Differentiate between the given terms: Accounts payable refers to liabilities or amounts owed by the company to creditors. Retained earnings are profits that the company has kept rather than distributed to shareholders. Revenue is the income generated from business operations.

Recognize that Owner's Equity is the correct term for the money paid into the company by its owners. It reflects their investment and ownership stake in the business.

Relate Owner's Equity to the balance sheet: On the balance sheet, Owner's Equity is listed under the equity section and includes contributions from owners and retained earnings.

Apply this understanding to similar problems: When asked about funds contributed by owners, always consider Owner's Equity as the appropriate term, distinguishing it from liabilities, revenues, or retained earnings.