About This Chapter
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Topics from your homework you'll be able to complete:
- The purpose and importance of accounting in business
- Internal and external users and uses of accounting
- Generally Accepted Accounting Principles (GAAP)
- The importance of ethics in accounting
- Technology in accounting
1. What Is Accounting? - Purpose, Importance & Relationship to Business
Just as French is considered the language of love, accounting is considered the language of business. In this lesson, you will learn exactly what accounting is. You will also learn the purpose of accounting, why it is important, and how it relates to the business world.
2. External and Internal Users and Uses of Accounting
Accounting has many uses. In this lesson, you will learn not only who accounting users are but also what types of accounting information is used. You will also learn the uses of that accounting information.
3. What Is GAAP? - The Generally Accepted Accounting Principles
Rules and regulations are a part of life for everyone, including those in the accounting industry. In this lesson, you will learn about GAAP standards, what they mean to accounting, and who establishes them.
4. The Importance of Ethics in Accounting
Ethics - are they really important in accounting? In this lesson, we will discuss what ethics are and what role they play in accounting; we'll also review a case that is deeply rooted in ethics. In the end, we will decide whether or not ethics are important in accounting.
5. Technology in Accounting: The Growing Role of Technology in Accounting
Change and technology go hand in hand, especially in the accounting industry. In this lesson, we will take a walk back in time and discuss some of the technological advances in accounting through the years. We will also discuss how these changes have affected the accounting process.
6. Zero-Based Budgeting: Definition, Advantages, Disadvantages & Examples
Many companies use some form of zero-based budgeting, which is a budgeting process where no amounts carry over from prior years and no programs are considered pre-approved. In this lesson, we'll learn why companies do this and how the process works.
7. Audit Committee: Role & Responsibilities
In this lesson we will explore how a Corporate Audit Committee functions as an appointed body of men and women representing the investors of a company to protect their investment from financial wrongdoing.
8. Average Collection Period: Formula & Analysis
In this lesson, you'll learn the purpose of calculating the average collection period and the two-step process. We'll also discuss which financial statements are needed to find the data and the importance of comparing the average collection period to the credit policy.
9. Bill of Quantities: Definition, Preparation, Format & Example
This lesson explains how bringing an architect's plan to life requires many tools, not just labor and planning but assessment. A measure of the work necessary to carry out the design is important. In Great Britain and Australia, a bill of quantities is used to produce these specifications.
10. Blank Endorsement: Definition & Example
Bankers are very familiar with endorsements. They see different types of endorsements every day. They are trained to check the endorsements so that they know how to handle the transaction and make sure it's accurate. Today we will discover what blank endorsement is.
11. Operating Leverage: Definition, Calculation & Examples
Explore the definition and importance of operating leverage, and take a look at examples to assist you in the accounting process. When you are finished with the lesson, there is a quiz to test your knowledge.
12. Period Costs in Accounting: Definition & Examples
In this lesson, we'll discuss the importance of accurately determining period costs. We'll also review accounting principles associated with classifying costs and examine types of period costs.
13. Periodic Inventory System: Definition, Advantages & Examples
Business owners use inventory systems to track and update inventory. This lesson defines the periodic inventory system, outlines its advantages and disadvantages, and demonstrates its use with an example.
14. Perpetual Inventory System: Definition, Advantages & Examples
Businesses keep track of inventory through inventory systems. This lesson will focus on one type of system - perpetual inventory system. It will define perpetual inventory system, examine its advantages and give an example.
15. Predetermined Overhead Rate: Formula & Example
Overhead costs can be very tricky to estimate but it is necessary to do so when job planning. There are a few ways to accomplish this and this lesson will discuss some of the ways to effectively compute a predetermined overhead rate.
16. Prepaid Expenses in Accounting: Definition & Examples
Prepaid expenses are a very common business activity that must be understood to effectively manage cash flow. This lesson explains when prepaid expenses are incurred and offers examples of common prepaid expenses.
17. Prime Cost in Accounting: Definition & Formula
Prime costs represents the total costs directly involved in manufacturing a product. This lesson breaks down the components of prime costs, its formula, and how it is used.
18. Private Good: Definition & Examples
In this lesson, we will define private good. We will compare it to a public good and provide examples. This will be followed by characteristics and a conclusion that helps capture the main points.
19. Purchase Decision: Definition & Hierarchy
In this lesson, you will learn the five stages to purchase decision that all consumers make when making a product choice. You will also see why this decision process is important to businesses when building a customer base.
20. Purchase Requisition: Definition & Process
This lesson explains what a purchase requisition is, how it is used to have purchases approved, and the role it plays in accounting controls. The process of using a purchase requisition is explained, and a quiz follows.
21. Purchases Journal: Definition & Example
This lesson explains what a purchase journal is, how it is used, and what types of transactions are recorded in a purchase journal. Several different examples of purchase journal postings are included.
22. Net Loss: Definition & Formula
Business owners hope that each period, the money brought in is more than the money paid out. But that's not always the case. In this lesson, you'll learn the definition and formula for net loss, and why it can be bad news for business owners.
23. Net Profit: Definition & Calculation
In this lesson, you will learn about net profit. You will learn the definition of net profit, how it is calculated, and see an example of how it relates to everyday life.
24. Elliott Wave Theory & Fibonacci Numbers in Finance
Elliot Wave Theory is chart analysis that attempts to break down price movement into 8-wave patterns made up of 5 impulse waves and 3 corrective waves. Using Fibonacci numbers, Elliot Wave Theory is used to predict future price movement.
25. Utility Theory: Expected & Marginal
This lesson will explain expected utility theory, which is used as a tool for making decisions under conditions of uncertainty and marginal utility, which quantifies the satisfaction obtained from consuming additional units of a product or service.
26. Utility Theory: Definition, Examples & Economics
This lesson will explain the economic concept of utility and the two ways it is measured. The usefulness of utility in the theoretical derivation of demand curves is also explained.
27. What is Alpha in Finance? - Definition & Formula
In this lesson, you will learn what alpha is in finance, how it is used to measure return based on risk, and its relationship with beta. You will also learn the formula for calculating alpha.
28. What is Beta in Finance? - Definition & Formula
In this lesson, you will learn what beta is, how it is used in finance, the formula to calculate it, and how to best utilize it for success in investing.
29. Accounting Profit vs. Economic Profit
In this lesson you will learn the differences between accounting profit and economic profit. You'll be able to calculate both and understand why accounting profit is usually larger than economic profit.
30. What are Professional References?
At some stage in your job search, chances are good that you will encounter a request for a list of professional references. In this article, you'll learn what a professional reference is (and isn't) and get some useful tips on how to choose them wisely.
31. Collateralized Mortgage Obligations (CMOs)
In this lesson, you will learn about a type of complex security called the collateralized mortgage obligation (CMO). A collateralized mortgage obligation is a type of security that uses mortgage backed security as collateral, hence the name of collateralized mortgage obligation.
32. What is Consumer Demand? - Theory & Examples
In this lesson, you will learn what consumer demand is, how it works together with supply, how it applies to the economy, and different methods for generating or understanding demand.
33. What is Tier 1 Capital? - Definition, Ratio & Core Capital
In this lesson, you will learn what Tier 1 capital stands for, what assets are included, how to calculate the required ratio, and its importance in how banks function.
34. Tier 2 Capital: Definition, Ratio & Calculation
In this lesson, you will learn about Tier 2 Capital, how it differs from the assets known as Tier 1 Capital, and the calculations required for the Tier 2 Capital ratio formula.
35. What is Currency Hedging? - Definition, Example & Risk
After this lesson, you will be able to understand the nature and purpose of hedging, identify the common derivative contracts and recognize the financial risks related to derivatives.
36. Hedging in Finance: Definition & Example
When individuals and institutions have investments in the stock market, they are exposed to the risk of financial losses. In this lesson, we'll learn about a way to protect against some losses, known in the financial industry as hedging.
37. What is the NASDAQ Stock Exchange?
Read this lesson to learn how the second largest stock exchange in the world got its start. You'll also learn the types of stocks that are traded on this stock exchange.
38. Functional Currency: Definition & Examples
Functional currency is the primary type of money that a company uses in its business activities. It is most relevant for multinational corporations that conduct business in multiple currencies. With the functional currency properly identified, overall business performance can be measured most accurately.
39. Mental Accounting: Definition & Example
Do you view your money in separate chunks? The concept of mental accounting says that you do. Learn how this can affect your spending and investing choices in this lesson.
40. Net Operating Assets: Definition & Calculation
Companies use some assets to generate revenue while others are used for financing purposes. In this lesson, you will learn about net operating assets.
41. Soft Dollar Arrangements
Payments for brokerage services provided to clients are tightly controlled and monitored by many different agencies. These dollars, soft dollars, are retained on a trade to be used for research services that provide a primary benefit to the client.
42. Hard Dollar Compensation
Financial planning and investing is a major part of our economy. Brokerage firms and traders are paid for services provided, known as hard dollars. This lesson will provide a basic investment overview and further explain hard dollar compensation.
43. What are Special Dividends?
A corporation can pay different types of dividends to its shareholders, the individuals who own its shares. In this lesson, you will learn about special dividends.
44. What is Speculation in the Stock Market?
In every financial market, speculation plays a key role. On some exchanges with cheap stocks, speculative trades are the primary trades happening. In this lesson, we'll discuss the role speculation plays in these financial markets.
45. Closed-End Fund (CEF) vs. Open-End Fund
In this lesson, we will look at the differences between closed-end funds and open-end funds, with special attention given to how these funds are bought and sold as well as priced.
46. Agency Loss: Definition & Examples
In this lesson, you will learn about agency loss which arises when two parties in a relationship (an agent and a principal) have different goals/motivations.
47. Economic Entity Assumption: Definition & Examples
Many concepts explain how companies should account for and present information to users of financial statements. In this lesson, you will learn about the economic entity assumption.
48. Monetary Unit Assumption: Definition & Examples
When a business transaction occurs, accountants must decide the amount to record in the company's books. One way of doing this is the monetary unit assumption, which you will learn about in this lesson.
49. Convertible Preferred Stock: Definition & Advantage
In this lesson, you will learn about some of the differences between common and preferred stock, with an emphasis on convertible preferred stock issues.
50. Convertible Preferred Stock: Formula & Examples
In this lesson, you will learn the main characteristics of convertible preferred stock. You will also learn some of the advantages and disadvantages of convertible preferred stock for the issuer and the investor.
51. Cumulative Preferred Stock: Definition & Advantage
When you invest in a company, you could choose to buy common stock or preferred stock. In this lesson, you will learn about cumulative preferred stock.
52. Cumulative Preferred Stock: Formula & Examples
In this lesson, you will learn the most important characteristics of cumulative preferred stock and its advantages and disadvantages. You will also learn financial formulas applied to cumulative preferred stock.
53. Participating Preferred Stock: Definition & Example
In this lesson, you will learn how dividends and liquidation proceeds are distributed to participating preferred stock shareholders. We will also discuss why venture capital firms use this financing vehicle to raise funds.
54. Callable Preferred Stock: Definition & Example
In this lesson we will review callable preferred stock shares. We will also explore the benefits and disadvantages of these shares for both the corporation and the investors.
55. Long-Term Investments: Definition, Types & Examples
In this lesson, you will learn to recognize and account for long-term investments. You will also learn when to use the equity method of accounting and consolidation accounting.
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Other chapters within the Financial Accounting: Homework Help Resource course
- Financial Statements in Accounting: Homework Help
- Mechanics of the Accounting Cycle: Homework Help
- Adjusting Accounts: Homework Help
- Internal Controls in Accounting: Homework Help
- Inventory and Merchandising Operations in Accounting: Homework Help
- Current and Long-Term Liabilities in Accounting: Homework Help