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

In cost-volume-profit (CVP) analysis, which of the following factors are primarily analyzed to predict how changes affect net income?

Tax rates and dividend policies

Accounts receivable turnover and asset impairment

Inventory valuation methods and depreciation

Sales volume, costs, and selling price

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Verified step by step guidance

Understand the concept of Cost-Volume-Profit (CVP) analysis: CVP analysis is a financial tool used to determine how changes in costs, sales volume, and selling price affect a company's net income. It focuses on the relationships between these factors to help businesses make informed decisions.

Identify the key factors in CVP analysis: The primary factors analyzed in CVP are sales volume, costs (both fixed and variable), and selling price. These elements directly impact the profitability of a business.

Eliminate irrelevant factors: Tax rates, dividend policies, accounts receivable turnover, asset impairment, inventory valuation methods, and depreciation are not the primary focus of CVP analysis. While these may affect financial statements, they are not central to CVP calculations.

Recognize the purpose of CVP analysis: The goal is to predict how changes in sales volume, costs, and selling price influence net income. This helps businesses plan for profitability, set sales targets, and manage costs effectively.

Apply CVP analysis in decision-making: Use the relationships between sales volume, costs, and selling price to calculate break-even points, target profit levels, and the impact of changes in these factors on net income. This analysis is crucial for budgeting and strategic planning.