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

1. Introduction to Accounting

Useful Information

Financial Accounting

1. Introduction to Accounting

Useful Information

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Multiple Choice

When evaluating special offer decisions, which of the following should management consider?

Relevant costs and revenues associated with the special offer

The impact on regular sales and existing customers

Sunk costs that have already been incurred

Historical costs of inventory

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Verified step by step guidance

Understand the concept of relevant costs and revenues: Relevant costs are future costs that will be directly affected by the decision at hand. Similarly, relevant revenues are future revenues that will change as a result of the decision. These are the primary factors to consider when evaluating a special offer.

Evaluate the impact on regular sales and existing customers: Management should assess whether the special offer will cannibalize regular sales or negatively affect relationships with existing customers. This includes analyzing customer loyalty and potential long-term effects on the business.

Exclude sunk costs: Sunk costs are costs that have already been incurred and cannot be recovered. These costs should not influence the decision-making process as they are irrelevant to future outcomes.

Exclude historical costs of inventory: Historical costs represent past expenditures and are not relevant to the decision about the special offer. Instead, focus on the current and future costs associated with the inventory.

Perform a cost-benefit analysis: Combine the relevant costs and revenues, along with the potential impact on regular sales and customers, to determine whether the special offer is financially beneficial for the company.