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

Preset costs for delivering a product or service under normal conditions are called ______ costs.

Fixed

Variable

Standard

Sunk

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Verified step by step guidance

Understand the concept of 'preset costs' in Financial Accounting. These are predetermined costs established under normal operating conditions to serve as benchmarks for measuring performance.

Review the term 'Standard Costs.' Standard costs are preset costs used in budgeting and cost control, representing the expected cost of delivering a product or service under normal conditions.

Differentiate 'Standard Costs' from other cost types: Fixed costs remain constant regardless of activity level, Variable costs change with activity level, and Sunk costs are past costs that cannot be recovered.

Recognize that 'Standard Costs' are used for planning and control purposes, helping businesses compare actual costs to expected costs to identify variances.

Conclude that the correct term for preset costs under normal conditions is 'Standard Costs,' as they are specifically designed for this purpose in Financial Accounting.