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

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which of the following inventory systems provides real-time updates to the Cost of Goods Sold (COGS) account with each sale?

Perpetual inventory system

Periodic inventory system

Just-in-time inventory system

Specific identification method

Previous problemNext problem

Verified step by step guidance

Understand the concept of inventory systems: Inventory systems are methods used by businesses to track and manage their inventory levels. The two primary systems are the perpetual inventory system and the periodic inventory system.

Learn about the perpetual inventory system: This system updates inventory records and the Cost of Goods Sold (COGS) account in real-time with each sale or purchase. It uses technology like barcode scanners and inventory management software to ensure accuracy.

Contrast with the periodic inventory system: The periodic inventory system updates inventory and COGS only at the end of an accounting period. It does not provide real-time updates, relying instead on physical inventory counts.

Understand the just-in-time inventory system: This system focuses on minimizing inventory levels by ordering goods only when needed. It is not directly related to real-time updates of COGS.

Learn about the specific identification method: This method tracks individual items of inventory and assigns specific costs to them. While it provides detailed tracking, it does not inherently update COGS in real-time like the perpetual inventory system.