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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

3. Accrual Accounting Concepts

Revenue Recognition and Expense Recognition

Financial Accounting

3. Accrual Accounting Concepts

Revenue Recognition and Expense Recognition

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Multiple Choice

The materials price variance is the difference between the actual price of materials and which of the following?

The standard price of materials, multiplied by the actual quantity purchased

The actual price of materials, multiplied by the standard quantity allowed

The standard cost of direct labor, multiplied by the actual hours worked

The standard price of materials, multiplied by the standard quantity allowed

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Verified step by step guidance

Understand the concept of materials price variance: It measures the difference between the actual cost of materials and the expected (standard) cost, based on the quantity purchased.

Identify the formula for materials price variance: The formula is (Actual Price - Standard Price) × Actual Quantity Purchased.

Analyze the options provided: The correct answer should align with the formula for materials price variance, which involves the standard price of materials and the actual quantity purchased.

Eliminate incorrect options: For example, options involving direct labor or standard quantity allowed do not match the formula for materials price variance.

Select the correct answer: The correct option is 'The standard price of materials, multiplied by the actual quantity purchased,' as it matches the formula for calculating materials price variance.