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

Fundamental Accounting Equation

Financial Accounting

1. Introduction to Accounting

Fundamental Accounting Equation

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Multiple Choice

Which of the following correctly represents the chronological order of material cost flows through the subsidiary records in the context of the fundamental accounting equation?

Work in Process Ledger → Materials Ledger → Finished Goods Ledger

Finished Goods Ledger → Work in Process Ledger → Materials Ledger

Materials Ledger → Finished Goods Ledger → Work in Process Ledger

Materials Ledger → Work in Process Ledger → Finished Goods Ledger

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Verified step by step guidance

Understand the fundamental accounting equation: Assets = Liabilities + Equity. In the context of cost flows, materials, work in process, and finished goods are part of the asset accounts.

Recognize the sequence of cost flows in manufacturing: Costs typically start with raw materials, move to work in process as production begins, and finally end in finished goods once production is complete.

Define the subsidiary records: The Materials Ledger tracks raw materials, the Work in Process Ledger tracks partially completed goods, and the Finished Goods Ledger tracks completed goods ready for sale.

Analyze the chronological order: Costs flow from the Materials Ledger (raw materials) to the Work in Process Ledger (production stage) and finally to the Finished Goods Ledger (completed goods).

Confirm the correct sequence: Materials Ledger → Work in Process Ledger → Finished Goods Ledger, as this reflects the logical progression of costs through the production process.