Table of contents

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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

Which of the following best describes the process for determining the sales tax and total purchase price of an item?

Divide the item's price by the sales tax rate to find the sales tax, then subtract it from the item's price to get the total purchase price.

Subtract the sales tax rate from the item's price to find the total purchase price.

Add the sales tax rate to the item's price, then multiply by the item's price to get the total purchase price.

Multiply the item's price by the sales tax rate to find the sales tax, then add the sales tax to the item's price to get the total purchase price.

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Verified step by step guidance

Step 1: Understand the concept of sales tax. Sales tax is a percentage of the item's price that is added to the price to determine the total purchase price.

Step 2: To calculate the sales tax, multiply the item's price by the sales tax rate. For example, if the item's price is P and the sales tax rate is R, the formula for sales tax is:

P \times R

Step 3: Once the sales tax is calculated, add it to the item's price to determine the total purchase price. The formula for total purchase price is:

P + SalesTax

Step 4: Ensure that the sales tax rate is expressed as a decimal when performing the calculation. For example, a 7% sales tax rate should be converted to 0.07 before multiplying.

Step 5: Verify your calculations by checking that the total purchase price is greater than the original item's price, as the sales tax is an additional cost.