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

Cost-volume-profit (CVP) analysis helps managers predict how changes in which of the following factors will affect a company's net income?

Tax rates only

Sales volume, costs, and selling prices

Inventory valuation methods only

Depreciation methods

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Verified step by step guidance

Understand the concept of Cost-Volume-Profit (CVP) analysis: CVP analysis is a financial tool used to determine how changes in sales volume, costs, and selling prices impact a company's net income. It helps managers make decisions about pricing, production levels, and cost management.

Identify the key factors in CVP analysis: The three main factors are sales volume, costs (both fixed and variable), and selling prices. These factors are interconnected and directly influence the company's profitability.

Recognize why tax rates, inventory valuation methods, and depreciation methods are not the focus of CVP analysis: While these factors affect financial reporting and tax calculations, they do not directly impact the operational relationship between sales, costs, and profits, which is the primary focus of CVP analysis.

Learn the formula used in CVP analysis: The basic formula is \( \text{Net Income} = \text{Sales Revenue} - \text{Variable Costs} - \text{Fixed Costs} \). This formula helps managers analyze how changes in sales volume, costs, and selling prices affect net income.

Apply CVP analysis in decision-making: Managers use CVP analysis to evaluate scenarios such as increasing sales volume, adjusting selling prices, or reducing costs. This helps them predict the impact on net income and make informed business decisions.