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 NOT typically considered a cost associated with holding inventory in a warehouse?

Insurance on inventory

Sales commissions paid to sales staff

Depreciation of warehouse equipment

Utilities for warehouse lighting and climate control

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Verified step by step guidance

Understand the concept of inventory holding costs: These are costs incurred to store and maintain inventory in a warehouse. Examples include insurance, utilities, depreciation, and other expenses directly related to the storage and upkeep of inventory.

Analyze each option provided in the question: Determine whether each cost is directly associated with holding inventory in a warehouse. For example, insurance on inventory is a cost incurred to protect the inventory, and utilities are necessary for lighting and climate control in the warehouse.

Consider the nature of sales commissions: Sales commissions are payments made to sales staff for selling products. These costs are not related to the storage or maintenance of inventory but are instead associated with the selling process.

Compare sales commissions to other options: Unlike insurance, depreciation, and utilities, sales commissions are not tied to the physical storage or management of inventory in the warehouse.

Conclude that sales commissions paid to sales staff are NOT typically considered a cost associated with holding inventory in a warehouse, as they are related to sales activities rather than inventory storage.