WIP inventories:
A) are not included on the balance sheet.
B) are associated with manufacturing.
C) are the same as VMI inventories.
D) are not impacted by EOQ.

Question

Quizplus · Accepted Answer

WIP (Work-in-Progress) inventories are a type of inventory that is associated with manufacturing processes. They represent partially completed products that are still in the production process. WIP inventories are not included on the balance sheet because they are not yet finished products that can be sold. VMI (Vendor-Managed Inventory) inventories are a type of inventory management system where the vendor manages the inventory levels for the customer, so it is not the same as WIP inventories. EOQ (Economic Order Quantity) is a model used to determine the optimal order quantity for inventory, but it does not impact WIP inventories because they are not yet at the stage of being ordered or sold.

WIP Inventories