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 of the following is the correct formula for determining Cost of Goods Manufactured (COGM)?

Beginning Raw Materials Inventory + Purchases - Ending Raw Materials Inventory

Net Sales - Cost of Goods Sold

Beginning Finished Goods Inventory + Purchases - Ending Finished Goods Inventory

Beginning Work in Process Inventory + Total Manufacturing Costs - Ending Work in Process Inventory

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Verified step by step guidance

Step 1: Understand the concept of Cost of Goods Manufactured (COGM). COGM represents the total cost incurred to manufacture products during a specific period, including direct materials, direct labor, and manufacturing overhead, adjusted for changes in Work in Process (WIP) inventory.

Step 2: Identify the components of the formula for COGM. The formula is: Beginning Work in Process Inventory + Total Manufacturing Costs - Ending Work in Process Inventory.

Step 3: Break down the formula: (a) Beginning Work in Process Inventory refers to the value of unfinished goods at the start of the period. (b) Total Manufacturing Costs include direct materials, direct labor, and manufacturing overhead incurred during the period. (c) Ending Work in Process Inventory refers to the value of unfinished goods at the end of the period.

Step 4: Apply the formula step by step: (a) Add the Beginning Work in Process Inventory to the Total Manufacturing Costs. (b) Subtract the Ending Work in Process Inventory from the result obtained in the previous step.

Step 5: Ensure accuracy by verifying that all inventory values and manufacturing costs are correctly recorded and calculated, as these are essential for determining the correct COGM.