Materials costs flow from the Materials Inventory account to the Work in Process Inventory account to the Finished Goods Inventory account.

Question

Quizplus · Accepted Answer

This is the correct flow of materials costs in a manufacturing process. The cost of materials is initially recorded in the Materials Inventory account. As the materials are used in production, their cost is transferred from the Materials Inventory account to the Work in Process Inventory account, which reflects the cost of materials used in the production of goods. Once the goods are completed, their cost is transferred from the Work in Process Inventory account to the Finished Goods Inventory account.

Materials Costs Flow from the Materials Inventory Account to the Work