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 inventory method typically most closely matches the actual flow of inventory being sold?

Specific Identification Method

First-In, First-Out (FIFO) Method

Weighted Average Cost Method

Last-In, First-Out (LIFO) Method

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Verified step by step guidance

Understand the concept of inventory flow: Inventory flow refers to the order in which goods are sold or used. Different methods simulate this flow to calculate the cost of goods sold and ending inventory.

Learn about the Specific Identification Method: This method tracks each individual item of inventory and matches its cost to the actual item sold. It is most accurate when inventory items are unique or easily identifiable, such as cars or jewelry.

Understand the First-In, First-Out (FIFO) Method: FIFO assumes that the oldest inventory items are sold first. This method often aligns with the physical flow of goods, especially for perishable items like food or medicine.

Explore the Weighted Average Cost Method: This method calculates the average cost of all inventory items and assigns this cost to items sold. It is useful when inventory items are indistinguishable or when prices fluctuate frequently.

Learn about the Last-In, First-Out (LIFO) Method: LIFO assumes that the newest inventory items are sold first. This method is less likely to match the actual physical flow of goods but can be beneficial for tax purposes in certain situations.