Product cost flows are cyclical in that the set of transactions that records the acquisition of raw materials,the conversion of raw materials to finished goods,and the sale of finished goods and related collection of cash occur over and over again.

Question

Quizplus · Accepted Answer

Product cost flows are indeed cyclical and repeat continuously as raw materials are acquired, converted into finished goods, and sold with cash collected. This cycle is known as the operating cycle of a business.

Product Cost Flows Are Cyclical in That the Set of Transactions