Which of the Following Statements Is True of the Flow

question 76

Multiple Choice

Which of the following statements is true of the flow of product and period costs for a manufacturer?

• A)When the manufacturing process is completed, the costs are transferred to the Work-in-Process Inventory account.
• B)The cost of the finished goods that the manufacturer sells becomes its Cost of Goods Sold on the income statement.
• C)Period costs remain in inventory accounts on the balance sheet until the product is sold.
• D)All product costs that have been paid are expensed and shown on the income statement at the end of the accounting period.

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Definitions:

Consolidated Cost Of Goods Sold

The aggregated cost of goods that have been used up in the production of goods or services sold by a company and its subsidiaries.

Year-end

The end of a fiscal year or calendar year, when companies close their books and summarize financial activities.

Eliminate Intra-entity Transfer

A consolidation procedure that removes transactions between entities within the same corporate group to avoid double counting in consolidated financial statements.

Equity Method

An accounting technique used to assess the profits earned by a company through its investment in another company, by reporting the income based on the investee's net income and changes in equity.