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 financial accounting, which term refers to the amount of money paid for raw materials and products that have been sold during a period?

Gross Profit

Operating Expenses

Cost of Goods Sold (COGS)

Ending Inventory

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Verified step by step guidance

Understand the concept of Cost of Goods Sold (COGS): COGS refers to the direct costs incurred in producing goods that have been sold during a specific period. It includes expenses like raw materials and direct labor but excludes indirect costs such as operating expenses.

Recognize the distinction between COGS and other financial terms: Gross Profit is the revenue minus COGS, Operating Expenses are costs not directly tied to production, and Ending Inventory represents unsold goods at the end of the period.

Learn the formula for calculating COGS: COGS = Beginning Inventory + Purchases During the Period - Ending Inventory. This formula helps determine the cost of goods sold during a specific accounting period.

Apply the formula to a scenario: To calculate COGS, identify the values for Beginning Inventory, Purchases, and Ending Inventory. Plug these values into the formula to compute the result.

Understand the importance of COGS in financial analysis: COGS is crucial for determining Gross Profit and assessing the profitability of a company. It also helps in inventory management and cost control.