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

Safety stock exists for which of the following reasons?

To eliminate the need for periodic inventory counts

To reduce the need for inventory management

To increase the carrying cost of inventory

To protect against uncertainties in demand and supply

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Verified step by step guidance

Understand the concept of safety stock: Safety stock is extra inventory maintained to mitigate the risk of stockouts caused by uncertainties in demand and supply.

Analyze the options provided: Evaluate each option to determine whether it aligns with the purpose of safety stock.

Option 1: 'To eliminate the need for periodic inventory counts' - This is incorrect because safety stock does not eliminate the need for inventory counts; it serves a different purpose.

Option 2: 'To reduce the need for inventory management' - This is incorrect because safety stock does not reduce the need for inventory management; it requires careful monitoring and planning.

Option 3: 'To protect against uncertainties in demand and supply' - This is correct because safety stock is specifically maintained to address fluctuations in demand and supply, ensuring smooth operations.