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 formulas correctly calculates the amount of direct materials used during a period?

Beginning Finished Goods Inventory + Purchases - Ending Finished Goods Inventory

Beginning Raw Materials Inventory + Purchases - Ending Raw Materials Inventory

Purchases + Ending Raw Materials Inventory - Beginning Raw Materials Inventory

Cost of Goods Manufactured - Direct Labor - Manufacturing Overhead

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Verified step by step guidance

Understand the concept: Direct materials used refers to the raw materials that are directly traceable to the production of goods during a specific period.

Recall the formula for calculating direct materials used: Direct Materials Used = Beginning Raw Materials Inventory + Purchases - Ending Raw Materials Inventory.

Break down the formula: The 'Beginning Raw Materials Inventory' represents the raw materials available at the start of the period. 'Purchases' refers to the raw materials bought during the period. 'Ending Raw Materials Inventory' represents the raw materials left unused at the end of the period.

Analyze the options provided: Compare each formula to the correct formula for direct materials used. Eliminate options that include Finished Goods Inventory or other unrelated components, as they do not pertain to raw materials.

Select the correct formula: Identify the formula that matches 'Beginning Raw Materials Inventory + Purchases - Ending Raw Materials Inventory' as the correct calculation for direct materials used.