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

If a prime contractor subcontracts some of the work, which type of accounting is primarily used to track the costs associated with both the contractor's and subcontractor's activities?

Financial accounting

Tax accounting

Managerial accounting

Cost accounting

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Verified step by step guidance

Understand the context of the problem: The question is asking about the type of accounting used to track costs for both the contractor and subcontractor activities. This involves analyzing costs incurred during a project.

Review the definitions of the accounting types mentioned: Financial accounting focuses on preparing financial statements for external stakeholders, tax accounting deals with compliance with tax laws, managerial accounting supports internal decision-making, and cost accounting tracks and analyzes costs associated with specific activities or projects.

Identify the key requirement: Since the problem involves tracking costs for both the contractor and subcontractor activities, the focus is on detailed cost analysis rather than external reporting or tax compliance.

Relate the requirement to the correct accounting type: Cost accounting is specifically designed to track, allocate, and analyze costs associated with projects, making it the most relevant type for this scenario.

Conclude that cost accounting is the correct answer because it provides the tools and methods to monitor and manage costs for both the contractor and subcontractor activities effectively.