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 included as an inventory holding cost?

Warehouse storage expenses

Cost of goods sold

Insurance on inventory

Obsolescence costs

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Verified step by step guidance

Step 1: Understand the concept of inventory holding costs. Inventory holding costs are expenses incurred to store and maintain inventory until it is sold. These costs typically include storage, insurance, depreciation, and obsolescence.

Step 2: Analyze each option provided in the question. Determine whether each expense is directly related to holding inventory. For example, warehouse storage expenses are costs associated with storing inventory, and insurance on inventory protects against risks like theft or damage.

Step 3: Consider the term 'obsolescence costs.' These are costs incurred when inventory becomes outdated or unsellable due to changes in market demand or product innovation. This is also a holding cost.

Step 4: Evaluate the term 'Cost of goods sold (COGS).' COGS refers to the direct costs of producing goods that are sold during a specific period, including materials and labor. It is not a holding cost because it is associated with sold inventory, not stored inventory.

Step 5: Conclude that the correct answer is 'Cost of goods sold,' as it is not typically included as an inventory holding cost. The other options (warehouse storage expenses, insurance on inventory, and obsolescence costs) are all examples of inventory holding costs.