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

3. Accrual Accounting Concepts

Introduction to Adjusting Journal Entries and Prepaid Expenses

Financial Accounting

3. Accrual Accounting Concepts

Introduction to Adjusting Journal Entries and Prepaid Expenses

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Multiple Choice

The direct materials budget is prepared using information from which of the following budgets?

Production budget

Direct labor budget

Cash budget

Sales budget

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Verified step by step guidance

Understand the purpose of the direct materials budget: It estimates the quantity and cost of materials required for production during a specific period.

Recognize the relationship between the direct materials budget and the production budget: The production budget provides the number of units to be produced, which directly impacts the quantity of materials needed.

Note that the direct materials budget does not rely on the direct labor budget, cash budget, or sales budget directly. These budgets serve other purposes, such as estimating labor costs, cash flows, and sales revenue.

Identify the key input from the production budget: The production budget specifies the number of units to be produced, which is essential for calculating the materials required.

Conclude that the direct materials budget is prepared using information from the production budget, as it provides the foundational data for estimating material needs.