Which Comes Third in the Flow of Costs

question 223

Multiple Choice

Which comes third in the flow of costs?

• A) Cost of goods sold
• B) Finished goods inventory
• C) Raw materials inventory
• D) Work in process inventory

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Definitions:

Cost of Goods Sold

Expenses directly linked to manufacturing goods for sale, covering both the cost of materials used and the wages for labor.

Closing Process

The year-end procedure used in accounting to transfer balances from temporary accounts to permanent accounts, preparing the books for the next fiscal period.

Selling Expenses

Costs incurred directly and indirectly in making sales, including advertising, commissions, and salaries of sales staff.

Human Resource Management

The strategic approach to the effective management of people in a company or organization in a way that helps their business gain a competitive advantage.