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

Net Sales

Financial Accounting

4. Merchandising Operations

Net Sales

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Multiple Choice

How do quarterly premium payments typically affect the annual cost of insurance as reported in net sales calculations?

Quarterly payments are not allowed for insurance premiums.

Quarterly payments decrease the total annual cost because of early payment discounts.

Quarterly payments usually increase the total annual cost due to added service or finance charges.

Quarterly payments have no effect on the annual cost; the total remains the same as a lump-sum payment.

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Verified step by step guidance

Understand the concept of quarterly premium payments: Quarterly payments divide the annual insurance premium into four smaller payments made throughout the year, rather than paying the full amount upfront.

Recognize the impact of service or finance charges: Insurance companies often add service or finance charges to quarterly payments to compensate for the administrative costs and the delayed receipt of the full premium amount.

Compare quarterly payments to lump-sum payments: A lump-sum payment typically avoids additional charges, as the full premium is paid upfront, reducing administrative costs for the insurer.

Analyze how quarterly payments affect the annual cost: Due to the added service or finance charges, the total annual cost of insurance is usually higher when premiums are paid quarterly compared to a lump-sum payment.

Relate this to net sales calculations: In financial accounting, the increased annual cost due to quarterly payments would be reflected in the expense accounts, potentially affecting net sales calculations indirectly if insurance costs are part of the cost structure.