At the end of the accounting period, most companies close variance accounts to:
A) Raw-Material Inventory.
B) Work-in-Process Inventory.
C) Finished-Goods Inventory.
D) Cost of Goods Sold.
E) Income Summary.

Question

Quizplus · Accepted Answer

Variance accounts, which record the differences between actual and standard costs, are typically closed to the Cost of Goods Sold (COGS) account at the end of an accounting period. This process helps in adjusting the COGS to reflect the actual costs incurred during the period.

At the End of the Accounting Period, Most Companies Close