Under absorption costing,all product costs are first recorded as assets in inventory accounts,and later transferred to the Cost of Goods Sold account when sold.

Question

Quizplus · Accepted Answer

This statement accurately describes the process of absorption costing. All direct and indirect costs of producing a product are included in the inventory cost, and are only expensed to Cost of Goods Sold when the product is actually sold.

Under Absorption Costing,all Product Costs Are First Recorded as Assets