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

Fundamental Accounting Equation

Financial Accounting

1. Introduction to Accounting

Fundamental Accounting Equation

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Multiple Choice

Which of the following transactions would increase both assets and liabilities?

Collecting cash from a customer for a previous sale

Issuing common stock for cash

Purchasing inventory on credit

Paying off a bank loan with cash

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Verified step by step guidance

Step 1: Begin by analyzing the nature of each transaction provided in the problem. The goal is to identify which transaction increases both assets and liabilities simultaneously.

Step 2: Evaluate the transaction 'Collecting cash from a customer for a previous sale.' This transaction increases cash (an asset) but decreases accounts receivable (another asset). Since liabilities are not affected, this transaction does not meet the criteria.

Step 3: Evaluate the transaction 'Issuing common stock for cash.' This transaction increases cash (an asset) and increases stockholders' equity, not liabilities. Therefore, this transaction does not meet the criteria.

Step 4: Evaluate the transaction 'Purchasing inventory on credit.' This transaction increases inventory (an asset) and accounts payable (a liability). Since both assets and liabilities increase, this transaction meets the criteria.

Step 5: Evaluate the transaction 'Paying off a bank loan with cash.' This transaction decreases cash (an asset) and decreases the loan payable (a liability). Since both assets and liabilities decrease, this transaction does not meet the criteria.