Product cost flows are cyclical in that the set of transactions that record 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 cyclical because the process of acquiring raw materials, converting them to finished goods, and selling them and collecting cash repeats itself over and over again. These recurring transactions make up a cycle that is essential to the operation of a business.

Product Cost Flows Are Cyclical in That the Set of Transactions