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 inventory systems typically includes a direct materials inventory account?

Perpetual inventory system for a manufacturing company

Perpetual inventory system for a merchandising company

Periodic inventory system for a merchandising company

Periodic inventory system for a service company

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Verified step by step guidance

Understand the concept of inventory systems: Inventory systems are methods used by companies to track and manage their inventory. The two main types are perpetual and periodic inventory systems.

Recognize the difference between perpetual and periodic systems: A perpetual inventory system continuously updates inventory records for purchases and sales, while a periodic inventory system updates inventory records at specific intervals, typically at the end of an accounting period.

Identify the types of companies: Manufacturing companies produce goods using raw materials, merchandising companies buy and sell finished goods, and service companies primarily provide services rather than physical goods.

Understand the role of direct materials inventory: Direct materials inventory is specific to manufacturing companies because it tracks raw materials used in production. Merchandising and service companies do not use direct materials inventory accounts as they do not produce goods.

Conclude that the perpetual inventory system for a manufacturing company typically includes a direct materials inventory account, as it continuously tracks raw materials used in production.