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 the context of inventory accounting, which of the following best describes 'target total cost'?

The predetermined cost that a company aims to achieve for producing or purchasing inventory, including all associated expenses.

The selling price of inventory items before deducting any expenses.

The actual cost of goods sold calculated at the end of the accounting period under the periodic inventory system.

The historical cost of inventory recorded at the time of purchase under the perpetual inventory system.

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Verified step by step guidance

Understand the term 'target total cost' in the context of inventory accounting. It refers to the predetermined cost that a company aims to achieve for producing or purchasing inventory, including all associated expenses such as materials, labor, and overhead.

Eliminate the option that refers to the selling price of inventory items before deducting any expenses. This is unrelated to the concept of 'target total cost' as it focuses on revenue rather than cost.

Eliminate the option that describes the actual cost of goods sold calculated at the end of the accounting period under the periodic inventory system. This represents the realized cost, not the targeted or planned cost.

Eliminate the option that refers to the historical cost of inventory recorded at the time of purchase under the perpetual inventory system. Historical cost is a record of past transactions, not a predetermined target.

Conclude that the correct description of 'target total cost' is the predetermined cost that a company aims to achieve for producing or purchasing inventory, including all associated expenses.