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 function of inventory in a company's accounting system?

To record cash receipts from customers

To calculate depreciation expense for fixed assets

To track the issuance of company stock

To provide a record of goods available for sale and help determine the cost of goods sold

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Verified step by step guidance

Understand the concept of inventory in accounting: Inventory represents goods that a company holds for sale in the ordinary course of business or materials used in production.

Recognize the primary function of inventory in accounting: It is used to provide a record of goods available for sale and to help determine the cost of goods sold (COGS).

Differentiate inventory from other accounting functions: Inventory is not related to recording cash receipts, calculating depreciation, or tracking stock issuance. These are separate accounting processes.

Learn how inventory impacts financial statements: Inventory is reported as a current asset on the balance sheet and plays a key role in calculating COGS, which is an expense on the income statement.

Understand the relationship between inventory and COGS: The formula for COGS is typically expressed as: \( \text{COGS} = \text{Beginning Inventory} + \text{Purchases} - \text{Ending Inventory} \). This calculation helps determine the cost of goods sold during a specific period.