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

7. Receivables and Investments

Introduction to Investments in Securities

Financial Accounting

7. Receivables and Investments

Introduction to Investments in Securities

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Multiple Choice

Capital budgeting is used to evaluate the purchase of:

Office supplies for daily operations

Long-term assets such as equipment or buildings

Short-term marketable securities

Inventory for resale within the next month

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Verified step by step guidance

Understand the concept of capital budgeting: Capital budgeting is the process of evaluating and selecting long-term investments that are in line with the goal of maximizing the value of the firm. It focuses on decisions related to acquiring or upgrading long-term assets such as equipment, buildings, or machinery.

Identify the nature of the options provided: Analyze each option to determine whether it pertains to long-term investments or short-term operational needs.

Option 1: 'Office supplies for daily operations' - These are short-term operational expenses and not considered long-term investments. Therefore, they are not evaluated using capital budgeting.

Option 2: 'Long-term assets such as equipment or buildings' - These are long-term investments and are the primary focus of capital budgeting. This aligns with the purpose of capital budgeting.

Option 3: 'Short-term marketable securities' and Option 4: 'Inventory for resale within the next month' - Both of these are short-term assets and are not evaluated using capital budgeting. They are typically managed through working capital management.