Increases to Work in Process Inventory are accompanied by a decrease to all but which one of the following accounts?
A)Raw Materials Inventory
B)Factory Labor
C)Manufacturing Overhead
D)Cost of Goods Sold

Question

Quizplus · Accepted Answer

Increases in Work in Process Inventory indicate that more products are in the production process, which means that the materials, labor, and overhead costs associated with those products have not yet been fully expensed. Therefore, these costs are debited to Work in Process Inventory and credited to Raw Materials Inventory, Factory Labor, and Manufacturing Overhead. Once the products are completed, the costs are moved from Work in Process Inventory to Finished Goods Inventory and then to Cost of Goods Sold when the products are sold. Therefore, an increase in Work in Process Inventory is accompanied by a decrease in Raw Materials Inventory, Factory Labor, and Manufacturing Overhead, but not in Cost of Goods Sold.

Increases to Work in Process Inventory Are Accompanied by a Decrease