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 corporate donation to a local food bank would be considered:

A cost of goods sold in managerial accounting

A revenue item in tax accounting

A philanthropic expense in financial accounting

A capital expenditure in governmental accounting

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Verified step by step guidance

Understand the nature of the transaction: A corporate donation to a local food bank is a voluntary contribution made by the company without expecting any direct financial return. This is important to classify the transaction correctly.

Review the definitions of the options provided: (1) Cost of goods sold in managerial accounting refers to the direct costs of producing goods sold by a company. (2) Revenue item in tax accounting refers to income earned by the company that is subject to taxation. (3) Philanthropic expense in financial accounting refers to charitable contributions or donations made by the company, which are recorded as expenses. (4) Capital expenditure in governmental accounting refers to funds used by an entity to acquire or upgrade physical assets such as property, buildings, or equipment.

Determine the correct classification: Since the donation is a charitable contribution, it aligns with the definition of a philanthropic expense in financial accounting. It is not related to the production of goods, income generation, or acquisition of physical assets.

Consider the accounting treatment: In financial accounting, philanthropic expenses are typically recorded as operating expenses on the income statement. They reduce the company's net income for the period.

Conclude the classification: Based on the analysis, the corporate donation to a local food bank is correctly classified as a philanthropic expense in financial accounting.