In a manufacturing environment,costs of materials initially flow
A)into the Work in Process Inventory account.
B)into the Materials Inventory account.
C)into the Cost of Goods Sold account.
D)into the Finished Goods Inventory account.

Question

Quizplus · Accepted Answer

Costs of materials are initially recorded in the Materials Inventory account, which tracks the cost of all raw materials on hand. As materials are used in production, the cost is then transferred to the Work in Process Inventory account. Once the products are completed, the costs are transferred to the Finished Goods Inventory account, and then finally to the Cost of Goods Sold account when the products are sold.

In a Manufacturing Environment,costs of Materials Initially Flow