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

Merchandise inventory includes all of the following except:

Office supplies used by administrative staff

Goods on consignment that are owned by the company but held by another party

Goods held for sale in the ordinary course of business

Goods in transit that are shipped FOB shipping point and owned by the company

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Verified step by step guidance

Step 1: Understand the concept of merchandise inventory. Merchandise inventory refers to goods that a company holds for sale in the ordinary course of business. It includes items that are ready for sale, goods in transit (depending on shipping terms), and goods on consignment owned by the company.

Step 2: Analyze the term 'goods on consignment.' These are goods owned by the company but held by another party for sale. Since the company retains ownership, these goods are included in merchandise inventory.

Step 3: Examine 'goods held for sale in the ordinary course of business.' These are the primary items that make up merchandise inventory, as they are intended for sale to customers.

Step 4: Consider 'goods in transit shipped FOB shipping point.' Under FOB shipping point terms, ownership transfers to the buyer once the goods leave the seller's premises. If the company owns these goods, they are part of merchandise inventory.

Step 5: Evaluate 'office supplies used by administrative staff.' These are not held for sale but are used internally by the company. Therefore, they are classified as supplies or expenses, not merchandise inventory.