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

Which of the following expenses is typically considered a variable cost?

Direct materials used in production

Depreciation on equipment

Salaries of administrative staff

Factory rent

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Verified step by step guidance

Understand the concept of variable costs: Variable costs are expenses that change in proportion to the level of production or activity. They increase or decrease depending on the volume of goods or services produced.

Analyze each option provided in the question: Direct materials used in production, Depreciation on equipment, Salaries of administrative staff, and Factory rent.

Evaluate 'Direct materials used in production': Direct materials are typically considered a variable cost because the amount used depends directly on the number of units produced. For example, if production increases, more materials are required, and the cost rises.

Evaluate 'Depreciation on equipment': Depreciation is a fixed cost because it does not change with the level of production. It is based on the allocation of the equipment's cost over its useful life.

Evaluate 'Salaries of administrative staff' and 'Factory rent': Both are fixed costs because they remain constant regardless of production levels. Administrative salaries are typically not tied to production volume, and factory rent is a recurring expense that does not vary with output.