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 can be directly linked to specific products in a company's inventory records?

Factory rent expense

Administrative salaries

Direct materials cost

Depreciation on office equipment

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Verified step by step guidance

Understand the concept of direct costs: Direct costs are expenses that can be directly traced to the production of specific goods or services. These costs are easily identifiable and measurable for each product.

Review the options provided: Factory rent expense, administrative salaries, direct materials cost, and depreciation on office equipment. Determine which of these can be directly linked to specific products.

Analyze each option: Factory rent expense and depreciation on office equipment are considered indirect costs because they support the overall production process but cannot be traced to individual products. Administrative salaries are also indirect costs as they relate to general business operations rather than specific products.

Focus on direct materials cost: Direct materials are raw materials that are used specifically in the production of a product and can be directly traced to that product. For example, wood used to manufacture furniture or fabric used to produce clothing.

Conclude that direct materials cost is the correct answer: It is the only cost among the options provided that can be directly linked to specific products in a company's inventory records.