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Which inventory account holds manufactured products that have been started but are not yet completed?
AThe Materials inventory account
BThe Work in Process account
CThe Finished Goods account
DThe Cost of Goods Sold account
Answer & Solution
Correct answer: B. The Work in Process account
1. A manufacturer carries three inventories: materials, work in process and finished goods.
2. Materials are items that have not yet been entered into production or used.
3. Work in process holds manufactured products that have been started but are not yet completed, so they are currently in production.
4. Finished goods are completed but unsold, and cost of goods sold is an expense account rather than an inventory.
_Source: Jonick, Principles of Managerial Accounting (UNG Press, CC BY-SA 4.0), section 1.3 Inventory Terminology and Concepts_
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