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

Service Company vs. Merchandising Company

Financial Accounting

4. Merchandising Operations

Service Company vs. Merchandising Company

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Multiple Choice

Landen Corporation uses a job order costing system. Which type of company is most likely to use this system?

A merchandising company that sells pre-packaged goods

A service company that provides custom consulting projects

A service company that offers standardized cleaning services

A merchandising company that operates a chain of retail stores

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Verified step by step guidance

Understand the concept of job order costing: Job order costing is a system used to assign costs to specific jobs or projects. It is typically used by companies that produce unique or customized products or services, as opposed to standardized or mass-produced items.

Analyze the options provided: Evaluate each type of company listed in the problem to determine whether they are likely to use job order costing based on their business model and the nature of their products or services.

Option 1: A merchandising company that sells pre-packaged goods. Merchandising companies typically sell standardized products and do not require job order costing, as their costs are not tied to specific jobs or projects.

Option 2: A service company that provides custom consulting projects. Custom consulting projects involve unique services tailored to individual clients, making job order costing appropriate for tracking costs specific to each project.

Option 3: A service company that offers standardized cleaning services and Option 4: A merchandising company that operates a chain of retail stores. Both involve standardized services or products, which are better suited for process costing or other systems rather than job order costing.