In what order do cost elements flow through accounts until they are recognized as an expense?

Question

Quizplus · Accepted Answer

The cost elements (direct and indirect costs) first flow through the "work in process" account as raw materials are transformed into work in progress. Once the work is completed, it moves to the "finished goods" account. Finally, when the finished goods are sold, their cost of production is recognized as an expense through the "cost of goods sold" account. Therefore, the correct order is work in process, finished goods, cost of goods sold, which is only represented in choice D.

In What Order Do Cost Elements Flow Through Accounts Until