Match the inventory-related accounts to costs that may be included in inventories for retailers and manufacturers.
-Cost of completed, but unsold items.
A)Merchandise Inventory
B)Raw Materials
C)Work in Process
D)Finished Goods
E)Cost of Goods Sold

Question

Quizplus · Accepted Answer

Finished Goods are the products that have been completed but are yet to be sold. The cost of these goods is included in the inventory until they are sold.

Answer: A
 For retailers, the inventory mainly consists of merchandise that has been purchased for resale. The cost of completed, but unsold merchandise is included in the Merchandise Inventory account.

Answer: E
 Cost of Goods Sold is the total cost of the products sold during a certain period. It includes the cost of both sold and unsold goods that were included in the inventory at the beginning of that period. Raw Materials and Work in Process are used by manufacturers to produce finished goods and are not directly related to the cost of completed, but unsold items.

Match the Inventory-Related Accounts to Costs That May Be Included