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How will you distinguish Cost, Expense,Cost of goods sold terminologies

(a) What is a service department? Name a few.
(b) What are some characteristics of a service department in connection with the establishment of a product cost ?

The board of directors of the Sebal Manufacturing Company had just received the company's financial statements. While reading them, one director asked, "What are the precise meanings of the terms 'cost,' 'expense,' and 'loss'? These terms sometimes seem to identify similar items and other times dissimilar items."
Required: (1) An explanation of the meanings of the terms (a) "cost," (b) "expense," and (c) "loss" as used for financial reporting in conformity with generally accepted accounting principles. The explanation should indicate distinguishing characteristics of the terms, their similarities and interrelationships.

(2) A classification of each of the following items as a cost, expense, loss, or other category with an explanation of how the classification of each item may change: 
(a) cost of goods sold; 
(b) bad debts expense; 
(c) depreciation expense for plant machinery; 
(d) organization costs; 
(e) spoiled goods. 

(3) The terms "period cost" and "product cost" are sometimes used to describe certain items in financial statements. Define these terms and distinguish between them. -To what types of items does each apply?
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