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

In financial accounting, the value of work in process (WIP) is equal to:

Total sales revenue minus cost of goods sold

Finished goods inventory at the end of the period

Net sales minus operating expenses

Direct materials used + Direct labor + Applied manufacturing overhead for incomplete units

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Verified step by step guidance

Understand the concept of Work in Process (WIP): WIP refers to the inventory that is partially completed during the manufacturing process. It includes costs incurred for direct materials, direct labor, and applied manufacturing overhead for incomplete units.

Identify the components of WIP: The value of WIP is calculated by summing up the costs of direct materials used, direct labor, and applied manufacturing overhead for the units that are not yet completed.

Direct materials used: Determine the cost of raw materials that have been introduced into the production process but are not yet part of finished goods.

Direct labor: Calculate the wages paid to workers who are directly involved in the production of the incomplete units.

Applied manufacturing overhead: Allocate indirect costs (e.g., factory utilities, depreciation, and maintenance) to the incomplete units based on a predetermined overhead rate.