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

Types of Accounting

Financial Accounting

1. Introduction to Accounting

Types of Accounting

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Multiple Choice

Why might variable expenses change over the course of a year?

Because variable expenses are fixed and do not depend on production or sales volume.

Because variable expenses fluctuate in direct proportion to changes in business activity or production levels.

Because variable expenses are only affected by changes in tax rates.

Because variable expenses are determined solely by annual budgets and remain constant.

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Verified step by step guidance

Understand the concept of variable expenses: Variable expenses are costs that change in proportion to business activity or production levels. Examples include raw materials, direct labor, and sales commissions.

Analyze the options provided in the problem: Evaluate each statement to determine which aligns with the definition of variable expenses.

Option 1 states that variable expenses are fixed and do not depend on production or sales volume. This contradicts the definition of variable expenses, as they are not fixed but fluctuate with activity levels.

Option 3 claims that variable expenses are only affected by changes in tax rates. This is incorrect because tax rates do not directly influence variable expenses; they are driven by production or sales activity.

Option 4 suggests that variable expenses are determined solely by annual budgets and remain constant. This is incorrect because variable expenses are not constant; they change with business activity. The correct answer is Option 2, which states that variable expenses fluctuate in direct proportion to changes in business activity or production levels.