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 are typically included as cost components for self-constructed assets under U.S. GAAP?

Selling and administrative expenses

Interest costs incurred during the construction period

Only direct materials and direct labor

Direct materials, direct labor, and a portion of manufacturing overhead

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Verified step by step guidance

Understand the concept of self-constructed assets under U.S. GAAP: These are assets that a company builds for its own use rather than purchasing them from external vendors. The costs associated with constructing these assets are capitalized, meaning they are included in the asset's value on the balance sheet.

Identify the cost components typically included for self-constructed assets: U.S. GAAP allows the capitalization of direct materials, direct labor, a portion of manufacturing overhead, and interest costs incurred during the construction period.

Clarify why selling and administrative expenses are excluded: These costs are considered period costs under U.S. GAAP and are expensed in the period incurred rather than being capitalized as part of the asset.

Understand the role of interest costs: Interest costs incurred during the construction period can be capitalized as part of the asset's cost, provided they meet the criteria outlined in U.S. GAAP (e.g., the asset must be a qualifying asset, and the interest must be directly attributable to the construction).

Summarize the correct answer: The cost components for self-constructed assets under U.S. GAAP typically include direct materials, direct labor, a portion of manufacturing overhead, and interest costs incurred during the construction period. Selling and administrative expenses are excluded.