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

Useful Information

Financial Accounting

1. Introduction to Accounting

Useful Information

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Multiple Choice

Which of the following is considered a period cost in financial accounting?

Direct materials used in production

Factory utilities expense

Depreciation on manufacturing equipment

Sales salaries expense

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Understand the concept of period costs: Period costs are expenses that are not directly tied to the production process. These costs are incurred over a specific period and are typically associated with selling, administrative, or general business operations.

Differentiate between product costs and period costs: Product costs include direct materials, direct labor, and manufacturing overhead, which are directly related to the production of goods. Period costs, on the other hand, are not part of the manufacturing process and are expensed in the period they are incurred.

Analyze each option provided: Direct materials used in production, factory utilities expense, and depreciation on manufacturing equipment are all product costs because they are directly tied to the production process.

Identify the correct period cost: Sales salaries expense is considered a period cost because it is related to the selling function of the business and not the manufacturing process.

Conclude that period costs are expensed in the income statement during the period they are incurred, while product costs are included in inventory and expensed as cost of goods sold when the goods are sold.