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

7. Receivables and Investments

Introduction to Investments in Securities

Financial Accounting

7. Receivables and Investments

Introduction to Investments in Securities

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Multiple Choice

Which of the following is NOT a reason why stocks generally appreciate in value over time?

Companies reinvest profits to grow their businesses.

Inflation tends to increase the nominal value of assets.

Economic growth can lead to higher corporate earnings.

Stock prices are guaranteed to rise regardless of economic conditions.

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Verified step by step guidance

Understand the concept of stock appreciation: Stock prices generally increase over time due to factors such as company growth, inflation, and economic expansion. These factors contribute to higher corporate earnings and asset values.

Analyze the reasons provided in the question: The first three options describe valid reasons for stock appreciation. Companies reinvest profits to grow their businesses, inflation increases nominal asset values, and economic growth leads to higher corporate earnings.

Evaluate the fourth option: 'Stock prices are guaranteed to rise regardless of economic conditions.' This statement is incorrect because stock prices are influenced by various factors, including market conditions, company performance, and investor sentiment. There is no guarantee of stock price appreciation.

Identify the correct answer: The fourth option is the one that does NOT explain why stocks generally appreciate in value over time. It incorrectly assumes that stock prices are guaranteed to rise under all circumstances.

Conclude the reasoning: Stock appreciation is not guaranteed and depends on external factors such as economic conditions, company performance, and market trends. This makes the fourth option the correct answer to the question.