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 costs is NOT capitalized as part of the cost of a building on the balance sheet?

Annual property insurance after occupancy

Architectural fees for building design

Cost of installing elevators

Legal fees to purchase the building

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Verified step by step guidance

Understand the concept of capitalized costs: Capitalized costs are expenditures that are included in the cost of an asset on the balance sheet. These costs are typically incurred to acquire, construct, or prepare the asset for its intended use.

Identify costs that are directly related to the acquisition or construction of the building: Costs such as architectural fees, elevator installation, and legal fees are typically capitalized because they are necessary to acquire or prepare the building for use.

Recognize costs that are incurred after the building is ready for use: Annual property insurance after occupancy is an example of a cost that is not capitalized. Instead, it is treated as a period expense and recorded on the income statement because it is a recurring cost related to the operation of the building.

Compare each option to determine whether it is a capitalized cost: Evaluate whether each cost is directly tied to acquiring or preparing the building for use. Costs incurred after the building is operational, such as annual property insurance, are not capitalized.

Conclude that the correct answer is the cost that is not capitalized: Based on the analysis, annual property insurance after occupancy is not capitalized as part of the building's cost on the balance sheet.