Where would you expect to find ending raw materials inventory?
A)on the costs of goods manufactured schedule as an addition to raw materials purchases, and on the Balance Sheet
B)on the costs of goods manufactured schedule as a subtraction from raw materials available for use, and on the Balance Sheet
C)only on the Balance Sheet
D)only the costs of goods manufactured schedule

Question

Quizplus · Accepted Answer

Ending raw materials inventory represents the value of materials that have not yet been used in production and are still available for use in the future. Therefore, it should be subtracted from raw materials available for use on the costs of goods manufactured schedule, and it should also be reported as a current asset on the Balance Sheet. Option A is incorrect because ending raw materials inventory is not an addition to raw materials purchases, but rather a deduction from raw materials available for use. Option C is incorrect because ending raw materials inventory should appear on the Balance Sheet but also needs to be accounted for in the costs of goods manufactured schedule. Option D is incorrect because the costs of goods manufactured schedule should reflect the cost of goods produced during the current period and not the value of ending raw materials inventory.

Where Would You Expect to Find Ending Raw Materials Inventory