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

4. Merchandising Operations

Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory

Financial Accounting

4. Merchandising Operations

Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory

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Multiple Choice

Which of the following is NOT a function of inventory in a merchandising or manufacturing business?

To provide a buffer between production and sales

To help meet unexpected demand

To allow for economies of scale in purchasing

To record depreciation expense

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Verified step by step guidance

Understand the concept of inventory: Inventory refers to the goods and materials a business holds for the purpose of resale or production. It plays a critical role in merchandising and manufacturing businesses.

Review the functions of inventory: Inventory serves several purposes, such as providing a buffer between production and sales, meeting unexpected demand, and allowing for economies of scale in purchasing. These functions help businesses operate efficiently and respond to market needs.

Analyze the given options: The first three options describe valid functions of inventory in a business context. They align with the operational and strategic roles inventory plays in ensuring smooth production and sales processes.

Evaluate the fourth option: 'To record depreciation expense' is not a function of inventory. Depreciation expense is related to the allocation of the cost of tangible fixed assets (e.g., machinery, equipment) over their useful lives, and it is unrelated to inventory management.

Conclude that the correct answer is the fourth option: Inventory does not record depreciation expense, as this is a financial accounting concept tied to fixed assets rather than inventory.