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

In a job order costing system, during production, to what account are the costs of direct materials, direct labor, and applied overhead assigned?

Finished Goods Inventory

Cost of Goods Sold

Raw Materials Inventory

Work in Process Inventory

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Verified step by step guidance

Understand the concept of a job order costing system: This system is used to assign costs to specific jobs or batches of production. It tracks direct materials, direct labor, and overhead costs for each job.

Recognize the role of Work in Process (WIP) Inventory: This account is used to accumulate costs for jobs that are still in production but not yet completed. It represents the value of partially completed goods.

Identify the types of costs assigned to WIP Inventory: Direct materials, direct labor, and applied overhead are all costs incurred during production and are assigned to the Work in Process Inventory account.

Understand the flow of costs: Costs are first assigned to Work in Process Inventory during production. Once the job is completed, the costs are transferred to Finished Goods Inventory. When the goods are sold, the costs move to Cost of Goods Sold.

Relate the accounts to the production process: Raw Materials Inventory is reduced when direct materials are used, and those costs are transferred to Work in Process Inventory. Similarly, direct labor and applied overhead are added to Work in Process Inventory as production progresses.