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CMA Final · Strategic Cost Management · Back Flush Accounting

Which feature best distinguishes back flush accounting from a conventional sequential costing system?

Back flush accounting uses trigger points, such as completion of goods or their sale, to record costs, rather than tracking every movement through production stages. This removes detailed work-in-process entries, which is what separates it from conventional sequential costing.

  1. ACosts are recorded at each stage of production as work in process moves between departments
  2. BStandard costs are never used for valuing finished goods
  3. CInventory records are updated using trigger points, not by tracking every movement of materials through productionCorrect
  4. DRaw material purchases are always charged directly to cost of goods sold

Explanation

Back flush accounting delays or omits recording of production-stage entries and instead uses trigger points such as purchase of materials, completion, or sale to flush costs. Option A describes sequential tracking. Option B is not a defining feature. Option D is wrong because purchases are normally charged to a raw-and-in-process inventory account unless the trigger is purchase-based only in a very limited sense.

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