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 best explains why a business incurs business overhead expenses?

To reduce the amount of taxes owed on profits

To record capital investments in long-term assets

To cover ongoing operational costs that are not directly tied to specific products or services

To increase the value of inventory on hand

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Verified step by step guidance

Understand the concept of business overhead expenses: These are costs that a business incurs to maintain its operations but are not directly tied to the production of goods or services. Examples include rent, utilities, salaries of administrative staff, and insurance.

Analyze the options provided in the question: Each option represents a different potential reason for incurring overhead expenses. Evaluate each one based on the definition and purpose of overhead expenses.

Option 1: 'To reduce the amount of taxes owed on profits' - This is not correct because overhead expenses are not incurred for tax reduction purposes; they are necessary for the ongoing operation of the business.

Option 2: 'To record capital investments in long-term assets' - This is incorrect because capital investments are recorded separately and are not considered overhead expenses.

Option 3: 'To cover ongoing operational costs that are not directly tied to specific products or services' - This is correct because it aligns with the definition of overhead expenses, which are necessary to support the business's operations as a whole.