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

Which inventory system provides a continuous record of inventory and cost of goods sold, updating these accounts after each purchase or sale?

Just-in-time inventory system

Perpetual inventory system

Periodic inventory system

Specific identification method

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Verified step by step guidance

Understand the key characteristics of each inventory system mentioned in the problem: Perpetual inventory system, Periodic inventory system, Just-in-time inventory system, and Specific identification method.

Learn that the Perpetual inventory system updates inventory and cost of goods sold accounts continuously after each purchase or sale, providing real-time tracking of inventory levels.

Contrast this with the Periodic inventory system, which updates inventory and cost of goods sold accounts only at the end of an accounting period, not after each transaction.

Recognize that the Just-in-time inventory system focuses on minimizing inventory levels by ordering goods only as needed, and does not inherently provide continuous updates to inventory records.

Understand that the Specific identification method tracks individual items of inventory and assigns costs based on the specific item sold, but it does not inherently provide continuous updates to inventory and cost of goods sold accounts like the Perpetual inventory system does.