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

2. Transaction Analysis

Classified Balance Sheet Components

Financial Accounting

2. Transaction Analysis

Classified Balance Sheet Components

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Multiple Choice

Which financial report displays the book (purchase or cost) value of inventory items along with the quantity on hand?

Income Statement

Accounts Receivable Aging Report

Statement of Cash Flows

Inventory Subsidiary Ledger

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Verified step by step guidance

Understand the purpose of the Inventory Subsidiary Ledger: It is a detailed record that tracks the quantity and cost value of inventory items. This ledger provides information about the book value (purchase or cost value) of inventory items along with the quantity on hand.

Compare the Inventory Subsidiary Ledger to other financial reports: The Income Statement summarizes revenues and expenses, the Accounts Receivable Aging Report tracks outstanding customer balances, and the Statement of Cash Flows shows cash inflows and outflows. None of these reports provide detailed inventory information.

Recognize the role of the Inventory Subsidiary Ledger in inventory management: It helps businesses monitor inventory levels, calculate the cost of goods sold (COGS), and ensure accurate financial reporting.

Understand how the Inventory Subsidiary Ledger supports financial accounting: It provides the necessary data for preparing the Balance Sheet and Income Statement by ensuring accurate inventory valuation.

Conclude that the Inventory Subsidiary Ledger is the correct report for displaying the book value and quantity of inventory items, as it is specifically designed for this purpose.