Acme Company's balance sheet shows three inventory accounts-raw materials,work in process,and finished goods.Acme Company must be a:
A)manufacturer.
B)merchandiser.
C)service business.
D)wholesale distributor.

Question

Quizplus · Accepted Answer

Manufacturers often hold three types of inventory,with each representing a different stage in the manufacturing process.They start with raw materials inventory such as plastic,steel,or fabrics.When these raw materials enter the production process,they become part of work in process inventory,which includes goods that are in the process of being manufactured.When completed,work in process inventory becomes finished goods inventory,which is ready for sale just like merchandise inventory.

Acme Company's Balance Sheet Shows Three Inventory Accounts-Raw Materials,work in Process,and