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

Real property can be converted into personal property by which of the following processes?

Depreciation

Severance

Appreciation

Amortization

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Verified step by step guidance

Understand the distinction between real property and personal property. Real property refers to land and anything permanently attached to it, such as buildings, while personal property refers to movable items not attached to land.

Learn the concept of severance. Severance is the process by which real property is converted into personal property. For example, if a tree is cut down from the land, it becomes personal property because it is no longer attached to the land.

Review the other terms provided in the options to ensure clarity: Depreciation refers to the reduction in the value of an asset over time, Appreciation refers to the increase in the value of an asset, and Amortization refers to the gradual repayment of a loan or the allocation of the cost of an intangible asset over time.

Identify that severance is the correct answer because it directly involves the physical act of separating something from the land, thereby converting it from real property to personal property.

Apply this understanding to similar scenarios in financial accounting or property management to reinforce the concept of severance and its implications in property classification.