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

Factory overhead is a _____ account.

revenue

permanent

contra-asset

temporary

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Verified step by step guidance

Understand the nature of factory overhead: Factory overhead refers to the indirect costs incurred during the production process, such as utilities, depreciation, and maintenance of equipment.

Recognize the classification of accounts: Accounts in financial accounting are categorized as temporary or permanent. Temporary accounts are closed at the end of the accounting period, while permanent accounts carry their balances forward to the next period.

Determine the purpose of factory overhead: Factory overhead is part of the cost of goods manufactured and is used to allocate indirect costs to production. It is not a revenue account or a contra-asset account.

Identify why factory overhead is temporary: Factory overhead is considered a temporary account because its balance is closed to the cost of goods manufactured or cost of goods sold at the end of the accounting period.

Conclude the correct classification: Factory overhead is a temporary account because it is used to accumulate costs during the period and is closed out at the end of the period.