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 accounts is considered a permanent account?

Service Revenue

Rent Expense

Dividends

Retained Earnings

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Understand the difference between permanent and temporary accounts. Permanent accounts (also known as real accounts) are not closed at the end of the accounting period and their balances are carried forward to the next period. Temporary accounts (also known as nominal accounts) are closed at the end of the accounting period and their balances are reset to zero.

Identify the nature of each account listed in the problem: Service Revenue, Rent Expense, Dividends, and Retained Earnings.

Service Revenue is a temporary account because it is used to record income earned during a specific period and is closed to Retained Earnings at the end of the period.

Rent Expense is also a temporary account because it records expenses incurred during a specific period and is closed to Retained Earnings at the end of the period.

Retained Earnings is a permanent account because it represents the cumulative net income (or loss) of the company that has been retained, rather than distributed as dividends, and its balance is carried forward to the next accounting period.