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 is true of retirement plans in the context of accounting?

They do not require any financial reporting disclosures.

They are considered a type of liability on the employer's balance sheet.

They are always classified as current assets.

They are recorded as revenue when contributions are made.

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Verified step by step guidance

Understand the context of the question: Retirement plans in accounting are obligations that employers have to their employees, typically involving future payments. These obligations are relevant to financial reporting and classification on the balance sheet.

Step 1: Analyze the first option: 'They do not require any financial reporting disclosures.' This is incorrect because retirement plans often require detailed disclosures in financial statements, including the nature of the plan, funding status, and actuarial assumptions.

Step 2: Analyze the second option: 'They are considered a type of liability on the employer's balance sheet.' This is correct because retirement plans represent obligations to pay benefits in the future, which are classified as liabilities (either current or non-current) depending on the timing of the payments.

Step 3: Analyze the third option: 'They are always classified as current assets.' This is incorrect because retirement plans are not assets for the employer; they are liabilities. Assets represent resources owned by the company, while liabilities represent obligations.

Step 4: Analyze the fourth option: 'They are recorded as revenue when contributions are made.' This is incorrect because contributions to retirement plans are not revenue; they are expenses for the employer, as they represent payments made to fund the obligation.