Join Rudolph Rosenberg for an in-depth discussion in this video Costs, part of Financial Literacy: Reading Financial Reports.
- [Voiceover] Cost is the name of those expenditures…that are related to products.…It is usually also called…cost of goods sold or COGS for short.…What we mean by that,…is that to sell a product to a customer,…you need to put that product together.…There's the raw material,…the machinery, the salary of workers,…in other words,…everything that we need to prepare that product.…For the ice cream shop,…this is the milk, sugar, eggs…and many more ingredients is the cups…in which you hand the ice cream to the customer,…is the paper napkins…and anything that comes into the fulfillment…of the orders of your customers.…
As explained in a previous video,…the income statement is reporting the activity…for a given period of time.…Therefore, the question of when to record the costs…becomes important.…Do you record the cost of producing goods…at the time of production…or do you do it at the time of the sale?…If you have produced a hundred pounds of ice cream…in December 2012,…do you record it in 2012…or do you record it in 2013…when the ice cream was actually sold?…
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- What is a financial statement?
- Reading the balance sheet
- Understanding depreciation, liabilities, and equity
- Reading the income statement
- Understanding revenue, costs, profitability, and net income
- How cash flow works
- Analyzing financial documents with context<br><br>
- The PMI Registered Education Provider logo is a registered mark of the Project Management Institute, Inc.
Skill Level Appropriate for all
1. Financial Statements
2. The Balance Sheet
3. The Income Statement
4. The Cash Flow Statement
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