When inventory is sold, where are the related costs transferred to?
A)Work in Process
B)Cost of Goods Sold
C)Finished Goods
D)Manufacturing Overhead

Question

Quizplus · Accepted Answer

The costs associated with inventory are transferred to the Cost of Goods Sold (COGS) account when the inventory is sold. This includes the direct materials, direct labor, and manufacturing overhead costs that were used to produce the goods. COGS is an expense account that is recognized on the income statement and reduces the company's gross profit.

When Inventory Is Sold, Where Are the Related Costs Transferred