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

Which type of accounting would most likely record the additional costs incurred after purchasing a computer, such as installation and setup fees, as part of the asset's value?

Cost Accounting

Tax Accounting

Financial Accounting

Managerial Accounting

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Verified step by step guidance

Understand the concept of capitalizing costs: In accounting, certain costs incurred after purchasing an asset, such as installation and setup fees, are often added to the asset's value rather than being expensed immediately. This process is known as capitalizing costs.

Identify the type of accounting that deals with asset valuation: Financial Accounting focuses on recording and reporting financial transactions, including the valuation of assets on the balance sheet. It ensures compliance with accounting standards like GAAP or IFRS.

Compare the options provided: Cost Accounting primarily deals with analyzing costs for internal decision-making, Tax Accounting focuses on tax compliance and reporting, and Managerial Accounting is used for internal management purposes. Financial Accounting is the most relevant for recording the asset's value.

Relate the scenario to Financial Accounting: When a company purchases a computer and incurs additional costs like installation and setup fees, these costs are capitalized and recorded as part of the asset's value in the financial statements under Financial Accounting.

Conclude the reasoning: Based on the explanation, Financial Accounting is the type of accounting most likely to record the additional costs incurred after purchasing a computer as part of the asset's value.