In a manufacturing organisation, the transfer from the work in process inventory account to the finished goods inventory account represents:

Question

Quizplus · Accepted Answer

The transfer from the work in process inventory account to the finished goods inventory account represents the cost of goods finished during the period, which includes the direct materials, direct labor, and manufacturing overhead costs that were incurred during the manufacturing process. This amount is then transferred to the finished goods inventory account, which is an asset on the balance sheet until the goods are sold and the cost of sales is recognized. Therefore, the best option is B, cost of goods finished during the period.

In a Manufacturing Organisation, the Transfer from the Work in Process