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

A copy machine rented for an office is an example of which type of cost?

Direct cost

Fixed cost

Variable cost

Opportunity cost

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Verified step by step guidance

Understand the definition of each cost type: Direct cost refers to expenses directly tied to a specific product or service. Fixed cost remains constant regardless of production levels. Variable cost changes with production levels. Opportunity cost represents the value of the next best alternative foregone.

Analyze the nature of the copy machine rental: The rental fee is typically a fixed amount paid periodically, regardless of how much the machine is used.

Determine if the cost changes with usage: Since the rental fee does not vary based on the number of copies made, it does not qualify as a variable cost.

Evaluate if the cost is directly tied to a specific product or service: The copy machine rental is not directly attributable to a single product or service, so it is not a direct cost.

Conclude that the copy machine rental is a fixed cost because it remains constant over time and does not depend on production or usage levels.