Which of the following lists presents the accounts in the order in which product costs flow?

Question

Quizplus · Accepted Answer

The flow of product costs begins with the purchase of raw materials, which is recorded in the Raw Materials Inventory account. When the raw materials are used in production, their costs are moved to the Work in Process Inventory account. Once the products are completed, their costs are transferred to the Finished Goods Inventory account. Finally, when the products are sold, their costs are recorded in the Cost of Goods Sold account. Therefore, the correct order is Raw Materials Inventory, Work in Process Inventory, Finished Goods Inventory, and Cost of Goods Sold, which is presented in option B.

Which of the Following Lists Presents the Accounts in the Order