Identify which one of the following statements regarding backflush costing is false.
A) Backflush costing does not have a Work- in- Process Inventory account.
B) Backflush costing has only one category of costs: conversion costs.
C) Costs are transferred out almost immediately after being initially recorded.
D) Some backflush- costing systems eliminate the Finished- Goods Inventory account and transfer costs directly to Cost of Goods Sold.

Question

Quizplus · Accepted Answer

Backflush costing typically involves multiple categories of costs, not just conversion costs. It simplifies the accounting process by delaying the recording of costs until after production is complete, but it still accounts for different types of costs such as materials and conversion costs.

Identify Which One of the Following Statements Regarding Backflush Costing