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

J is 35 years old and looking to purchase a small business. To evaluate the company's past financial performance and current financial position, which type of accounting information would be most useful to J?

Financial accounting

Tax accounting

Cost accounting

Managerial accounting

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Verified step by step guidance

Understand the purpose of each type of accounting mentioned in the problem: Financial accounting, Tax accounting, Cost accounting, and Managerial accounting.

Recognize that Financial Accounting focuses on providing external stakeholders, such as investors or potential buyers, with information about a company's financial performance and position through financial statements like the balance sheet, income statement, and cash flow statement.

Identify that Tax Accounting deals with compliance and preparation of tax returns, which is not directly relevant to evaluating the overall financial health of a business for purchase purposes.

Understand that Cost Accounting is primarily used internally to analyze costs and improve efficiency, which is not the primary focus for someone evaluating a business for purchase.

Note that Managerial Accounting provides internal reports for decision-making within the company, which is not typically shared with external parties like potential buyers. Therefore, Financial Accounting is the most relevant type of information for J to evaluate the company's past financial performance and current financial position.