Regarding the flow of costs through the inventory accounts,which of the following statements is incorrect?
A) The final amount at each stage is added at the beginning of the next stage.
B) The costs flow from Raw Materials Inventory to Work-in-Process Inventory to Finished Goods Inventory.
C) Purchases of raw material and freight in are debited to the Work-in-Process Inventory account.
D) The format for computing the amount used, manufactured, or sold is the same for all three inventory accounts.

Question

Quizplus · Accepted Answer

Purchases of raw materials and freight in are debited to Raw Materials Inventory account, not Work-in-Process Inventory account. The correct flow is: Raw Materials Inventory -> Work-in-Process Inventory -> Finished Goods Inventory. The final amount at each stage is added at the end of the stage, not the beginning. The format for computing the amount used, manufactured, or sold may differ for each inventory account.

Regarding the Flow of Costs Through the Inventory Accounts,which of the Following