If ending variances account balances are material,they should always be closed directly to Cost of Goods Sold.

Question

Quizplus · Accepted Answer

Ending variances account balances may be closed directly to Cost of Goods Sold if the amounts are material and relate specifically to COGS. However, in some cases, they may need to be allocated among other accounts. It ultimately depends on the specific circumstances of the company and the nature of the variances.

If Ending Variances Account Balances Are Material,they Should Always Be