When goods are sold, their costs are transferred from Work in Process to Finished Goods.

Work in Process

A part of the inventory account on the balance sheet that represents goods in various stages of production but not yet completed.

Finished Goods

Products that have completed the manufacturing process but have not yet been sold or distributed to the end customer.

Goods Sold

Represents the total quantity of goods that have been sold to customers during a specific accounting period.

Comprehend how costs flow through accounts in manufacturing settings, including the movement from Work in Process to Finished Goods.

Verified Answer

Final Answer :

False

Explanation :

When goods are sold, their costs are transferred from Finished Goods to Cost of Goods Sold, not from Work in Process to Finished Goods.

Learning Objectives

Comprehend how costs flow through accounts in manufacturing settings, including the movement from Work in Process to Finished Goods.