Costs assigned to goods sold are transferred to the Cost of Goods Sold account from the ________.

Question

Quizplus · Accepted Answer

Costs assigned to goods sold come from the Finished Goods Inventory account, as this account holds the value of finished products that are ready to be sold. When a sale is made, the cost of the goods sold is transferred from the Finished Goods Inventory account to the Cost of Goods Sold account. The Work-in-Process Inventory account holds the value of products that are in the process of being manufactured, and the Raw Materials Inventory account holds the value of materials that are used in production but have not yet been used to make a finished product. The Sales Revenue account is used to record the revenue earned from the sale of goods, not the cost of the goods sold.

Costs Assigned to Goods Sold Are Transferred to the Cost