Which of the following is correct?
A)The raw materials inventory account is used to record inventory purchased by a retailer for resale.
B)Work in process is an expense account used by a manufacturing company.
C)Finished goods is an asset account used by a manufacturing company to record the cost of inventory ready for sale.
D)Retailers use a purchases account to record raw materials inventory.

Question

Quizplus · Accepted Answer

Finished goods is an asset account used by a manufacturing company to record the cost of inventory ready for sale. A is incorrect because raw materials inventory account is used to record inventory purchased by a manufacturer for use in the manufacturing process. B is incorrect because work in process is a balance sheet account used by a manufacturing company to record the cost of partially completed products still in the manufacturing process. D is incorrect because retailers use a purchases account to record the cost of inventory purchased for resale, not raw materials inventory.

Which of the Following Is Correct