Which of the following costs is not included as inventory on the balance sheet?
A)Raw materials to be used in the manufacturing process.
B)Work in process.
C)Finished goods.
D)Freight-out costs for finished goods sent to retailers.

Question

Quizplus · Accepted Answer

Freight-out costs for finished goods sent to retailers are not included as inventory on the balance sheet. These costs are expensed on the income statement as cost of goods sold when the goods are sold and shipped to the retailers. Raw materials, work in process, and finished goods are all included as inventory on the balance sheet until they are sold, at which point they are expensed as cost of goods sold.

Which of the Following Costs Is Not Included as Inventory