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

Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory

Financial Accounting

4. Merchandising Operations

Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory

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Multiple Choice

Which of the following is a statistical method used for identifying cost behavior in accounting?

Weighted average method

High-low method

Specific identification method

First-in, first-out (FIFO) method

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Verified step by step guidance

Understand the concept of cost behavior: Cost behavior refers to how costs change in response to changes in activity levels. Identifying cost behavior is crucial for budgeting and decision-making in accounting.

Learn about the high-low method: The high-low method is a statistical technique used to estimate fixed and variable costs by analyzing the highest and lowest levels of activity and their corresponding costs.

Compare the options provided: Weighted average method, specific identification method, and FIFO method are not statistical methods for identifying cost behavior. They are used for inventory valuation and cost allocation purposes.

Focus on the high-low method: This method uses the formula for variable cost per unit: \( \text{Variable Cost per Unit} = \frac{\text{Cost at High Activity Level} - \text{Cost at Low Activity Level}}{\text{High Activity Level} - \text{Low Activity Level}} \). Fixed costs can then be determined by subtracting the total variable cost from the total cost at either activity level.

Conclude that the high-low method is the correct statistical method for identifying cost behavior in accounting, as it specifically analyzes cost changes relative to activity levels.