Which of the following is TRUE of Finished Goods Inventory?
A) Finished Goods Inventory is an account used by a manufacturer and includes completed goods that have not yet been sold.
B) Finished Goods Inventory is an account used by a merchandiser and includes completed goods that have not yet been sold.
C) Finished Goods Inventory is an account used by service companies in lieu of raw materials inventory.
D) Finished Goods Inventory is an account used by a manufacturer in lieu of raw materials inventory.

Question

Quizplus · Accepted Answer

Finished Goods Inventory is an account specifically used by manufacturers to account for products that have been completed but have not yet been sold. This distinguishes it from raw materials inventory, which is used to account for materials that have yet to be manufactured into final products, and from the inventories maintained by merchandisers or service companies, which do not produce goods.

Which of the Following Is TRUE of Finished Goods Inventory