What is the correct order of the flow of product costs through the inventory system?
A) Materials Inventory, Work in Process, Cost of Goods Sold, Finished Goods
B) Materials Inventory, Work in Process, Finished Goods, Cost of Goods Sold
C) Work in Process, Finished Goods, Materials Inventory, Cost of Goods Sold
D) Cost of Goods Sold, Work in Process, Materials Inventory, Finished Goods

Question

Quizplus · Accepted Answer

The correct order starts with Materials Inventory (where raw materials are stored), then moves to Work in Process (where products are partially completed), then to Finished Goods (where products are completed but not yet sold), and finally to Cost of Goods Sold (where the cost of the products sold is recorded).

What Is the Correct Order of the Flow of Product