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

Fundamental Accounting Equation

Financial Accounting

1. Introduction to Accounting

Fundamental Accounting Equation

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Multiple Choice

The arithmetic average rate of return measures the ______.

total cash inflows from an investment

present value of future cash flows

amount of owner's equity in a business

average profitability of an investment over its life

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Verified step by step guidance

Understand the concept of the arithmetic average rate of return: It is a financial metric used to measure the average profitability of an investment over its life. This is calculated by averaging the annual returns of the investment.

Identify the formula for the arithmetic average rate of return: The formula is typically expressed as:

\sum R

_tn, where

R

_t represents the return for each year and

n

is the number of years.

Break down the formula: The numerator (

\sum R

_t) represents the sum of annual returns over the investment's life, while the denominator (

n

) represents the total number of years.

Apply the formula to the given data: To calculate the arithmetic average rate of return, sum up all the annual returns of the investment and divide the total by the number of years the investment was held.

Interpret the result: The arithmetic average rate of return provides insight into the average profitability of the investment over its life, helping investors evaluate its performance.