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 statement below correctly explains what merchandise inventory is?

Merchandise inventory refers to goods a company owns and intends to sell to customers.

Merchandise inventory refers to the cash a company holds for daily operations.

Merchandise inventory includes only goods that have already been sold to customers.

Merchandise inventory is the total value of a company's fixed assets.

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Verified step by step guidance

Understand the term 'merchandise inventory': Merchandise inventory refers to goods that a company owns and intends to sell to customers as part of its normal business operations. It is classified as a current asset on the balance sheet.

Eliminate incorrect options: Review each statement provided and identify any that do not align with the definition of merchandise inventory.

Analyze the first option: 'Merchandise inventory refers to goods a company owns and intends to sell to customers.' This matches the definition of merchandise inventory and is likely correct.

Evaluate the second option: 'Merchandise inventory refers to the cash a company holds for daily operations.' This is incorrect because cash is not considered merchandise inventory; it is classified as a separate current asset.

Review the third and fourth options: 'Merchandise inventory includes only goods that have already been sold to customers' is incorrect because inventory refers to unsold goods. 'Merchandise inventory is the total value of a company's fixed assets' is also incorrect because fixed assets are long-term assets, not inventory.