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 of the following securities has a purely fixed claim against a firm's cash flows?

Corporate bond

Preferred stock

Common stock

Stock option

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Understand the concept of 'fixed claim': A fixed claim refers to a financial instrument where the holder is entitled to a predetermined amount of cash flows, regardless of the firm's performance.

Analyze the characteristics of each security: Corporate bonds, preferred stock, common stock, and stock options have different claims on a firm's cash flows.

Corporate bond: A corporate bond represents a debt instrument where the bondholder is entitled to fixed interest payments and the repayment of principal at maturity. This is a purely fixed claim.

Preferred stock: Preferred stockholders receive dividends, but these are not guaranteed and depend on the firm's decision to pay them. This is not a purely fixed claim.

Common stock and stock options: Common stockholders have residual claims on cash flows after all obligations are met, and stock options provide the right to purchase stock at a specific price. Neither has a fixed claim.