The Work-in-Process Inventory account is _____.Product costs accumulate in the Work-in-Process Inventory account until the firm completes the goods and transfers them to _____.
A)an asset; Finished Goods Inventory
B)a liability; Finished Goods Inventory
C)an asset; Cost of Goods Sold
D)a liability; Cost of Goods Sold
E)produced capital; Cost of Goods Sold

Question

Quizplus · Accepted Answer

The Work-in-Process Inventory account is classified as an asset since it represents the value of products that have been partially completed but not yet transferred to Finished Goods Inventory. As the firm completes the goods, their cost is transferred from the Work-in-Process Inventory account to the Finished Goods Inventory account, which is also an asset. Once the goods are sold, their cost is transferred from Finished Goods Inventory to the Cost of Goods Sold account, which is an expense account. Therefore, choice A) is the correct answer.

The Work-In-Process Inventory Account Is _____