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 a variable expense?

Depreciation on equipment

Factory rent

Salaries of administrative staff

Direct materials cost

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Verified step by step guidance

Understand the concept of variable expenses: Variable expenses are costs that change in proportion to the level of production or business activity. They increase or decrease depending on the volume of goods or services produced.

Analyze each option provided in the problem: Depreciation on equipment, factory rent, and salaries of administrative staff are fixed expenses because they do not vary with production levels. These costs remain constant regardless of the number of units produced.

Focus on the correct answer: Direct materials cost is a variable expense because it directly depends on the quantity of goods produced. For example, if more units are manufactured, more raw materials are required, increasing the direct materials cost.

Relate the concept to real-world scenarios: Think of direct materials as the raw ingredients in a recipe. If you bake more cakes, you need more flour, sugar, and eggs, which increases the cost proportionally.

Summarize the key takeaway: Variable expenses, like direct materials cost, fluctuate with production levels, while fixed expenses remain constant regardless of output.