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

Expenses a firm incurs for insurance, office salaries, and rent are classified as:

Operating expenses

Capital expenditures

Cost of goods sold

Non-operating expenses

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Verified step by step guidance

Understand the classification of expenses: Operating expenses are costs incurred during the normal operations of a business, such as insurance, office salaries, and rent. These are necessary for the day-to-day functioning of the business.

Differentiate between operating expenses and other types of expenses: Capital expenditures are investments in long-term assets, cost of goods sold relates to the direct costs of producing goods, and non-operating expenses are costs not related to core business operations.

Analyze the nature of the given expenses: Insurance, office salaries, and rent are recurring costs that support the business's operations but are not directly tied to the production of goods or services.

Classify the expenses: Since these costs are essential for running the business and are not related to production or long-term investments, they fall under the category of operating expenses.

Conclude that the correct classification for these expenses is 'Operating expenses,' as they align with the definition and characteristics of this category.