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

All costs of production other than direct materials and direct labor are shown on the:

Work in Process account

Raw Materials account

Finished Goods account

Manufacturing Overhead account

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Verified step by step guidance

Understand the components of production costs: Direct materials, direct labor, and manufacturing overhead. Direct materials and direct labor are directly traceable to the product, while manufacturing overhead includes all other indirect costs.

Review the purpose of the Manufacturing Overhead account. This account is used to accumulate all indirect costs of production, such as factory utilities, depreciation on equipment, and salaries of supervisors.

Compare the Manufacturing Overhead account with other accounts mentioned in the problem: Work in Process, Raw Materials, and Finished Goods. Note that Work in Process tracks costs for partially completed goods, Raw Materials tracks the cost of materials not yet used, and Finished Goods tracks costs for completed products.

Recognize that indirect costs, which are not directly traceable to specific products, are recorded in the Manufacturing Overhead account rather than the other accounts listed.

Conclude that all costs of production other than direct materials and direct labor are accumulated in the Manufacturing Overhead account, as it is specifically designed for this purpose.