Goods that are produced by a manufacturing company and are ready to sell are recorded in the:
A)Materials Inventory account.
B)Work-in-Process Inventory account.
C)Manufacturing Overhead account.
D)Finished Goods Inventory account.

Question

Quizplus · Accepted Answer

Finished goods are products that are fully manufactured and ready for sale. They are not in the raw materials stage or in the production process, so they would not be recorded in the Materials Inventory or Work-in-Process Inventory accounts. Manufacturing Overhead refers to indirect expenses incurred in the manufacturing process, and not to the actual products themselves. Therefore, the correct account for recording fully finished and ready-to-sell goods is the Finished Goods Inventory account.

Goods That Are Produced by a Manufacturing Company and Are