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

Profit equals total minus total .

assets; liabilities

income; dividends

sales; cost of goods sold

revenue; expenses

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Verified step by step guidance

Understand the concept of profit: Profit is the financial gain achieved when revenue exceeds expenses during a specific period.

Identify the components of profit: Revenue refers to the total income generated from business activities, while expenses represent the costs incurred to generate that revenue.

Recognize the formula for profit: Profit = Revenue - Expenses. This formula highlights the relationship between income and costs in determining profitability.

Clarify the incorrect options: 'Assets minus liabilities' refers to equity, not profit. 'Income minus dividends' relates to retained earnings, and 'Sales minus cost of goods sold' calculates gross profit, not overall profit.

Apply the correct answer: To calculate profit, subtract total expenses from total revenue, as stated in the problem.