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:

Net Profit

The actual profit after working expenses not included in the calculation of gross profit have been paid.

Sales Volume

The total quantity of sales transactions or products sold by a business within a specific period.

Net Assets

The total assets of an entity minus its total liabilities, representing the entity's equity value.

Accounts Payable

Liabilities of a business that represent money owed to creditors for goods or services purchased on credit.