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

Kenya used a debit card to buy a pair of jeans. Which statement is true about her method of payment?

The transaction created a liability that must be repaid with interest.

She will receive a monthly bill to pay for the jeans later.

The payment was deducted directly from her bank account at the time of purchase.

The purchase increased her available credit limit.

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Verified step by step guidance

Understand the concept of a debit card: A debit card is linked directly to the user's bank account, and transactions made using a debit card are deducted immediately from the account balance.

Analyze the options provided in the problem: Evaluate each statement to determine which aligns with the functionality of a debit card.

Option 1: 'The transaction created a liability that must be repaid with interest.' This describes a credit card, not a debit card, as debit card transactions do not create liabilities or involve interest.

Option 2: 'She will receive a monthly bill to pay for the jeans later.' This is also characteristic of a credit card, where purchases are billed monthly. Debit card transactions are settled immediately.

Option 3: 'The payment was deducted directly from her bank account at the time of purchase.' This is the correct description of how a debit card works, as funds are withdrawn directly from the linked bank account at the time of the transaction.