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

1. Introduction to Accounting

Types of Accounting

Financial Accounting

1. Introduction to Accounting

Types of Accounting

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Multiple Choice

Family Furniture Corporation incurred the following costs: purchase of raw materials, wages for assembly workers, factory utilities, and advertising expenses. Which of the following costs would be classified as a period cost?

Purchase of raw materials

Wages for assembly workers

Factory utilities

Advertising expenses

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Verified step by step guidance

Understand the concept of period costs: Period costs are expenses that are not directly tied to the production process and are expensed in the period they are incurred. These costs are typically related to selling, administrative, or general business operations.

Review the costs provided in the problem: The costs listed are purchase of raw materials, wages for assembly workers, factory utilities, and advertising expenses.

Classify each cost: - Purchase of raw materials: This is a direct cost tied to production, so it is a product cost. - Wages for assembly workers: These are direct labor costs tied to production, so they are product costs. - Factory utilities: These are indirect costs tied to production, so they are product costs. - Advertising expenses: These are related to selling and promoting the product, not production, so they are period costs.

Identify the correct classification: Advertising expenses are the only costs listed that are classified as period costs because they are not directly tied to the manufacturing process.

Conclude that period costs are expensed in the period they are incurred and are not included in the cost of goods manufactured or inventory valuation.