Backflush systems assume that conversion-costs account balances should be approximately zero at all times.

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Backflush systems are designed to automatically calculate the cost of goods sold and reduce the inventory account without the need for tracking individual production costs. This assumes that conversion-costs account balances should be approximately zero at all times because any costs that are not directly related to the production of goods will be eliminated in the backflush process.

Backflush Systems Assume That Conversion-Costs Account Balances Should Be Approximately