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

Net Sales

Financial Accounting

4. Merchandising Operations

Net Sales

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Multiple Choice

Wages earned over the course of a year are a worker's:

Retained earnings

Operating expenses

Gross income

Net sales

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Verified step by step guidance

Understand the concept of 'Gross Income': Gross income refers to the total earnings a worker receives before any deductions such as taxes, insurance, or retirement contributions. It is the starting point for calculating net income.

Clarify why 'Retained Earnings' is incorrect: Retained earnings are profits that a company keeps after paying dividends to shareholders. This term applies to businesses, not individual workers.

Clarify why 'Operating Expenses' is incorrect: Operating expenses are costs incurred by a business to maintain its operations, such as rent, utilities, and salaries. This term does not apply to individual earnings.

Clarify why 'Net Sales' is incorrect: Net sales refer to a company's revenue after deducting returns, allowances, and discounts. This term is unrelated to individual wages.

Conclude that 'Gross Income' is the correct answer: Wages earned over the course of a year represent the worker's gross income, as it is the total amount earned before any deductions.