Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

4. Merchandising Operations

Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory

Financial Accounting

4. Merchandising Operations

Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

As production takes place, all manufacturing costs are added to the:

Cost of Goods Sold account

Finished Goods Inventory account

Work in Process Inventory account

Raw Materials Inventory account

Previous problemNext problem

Verified step by step guidance

Understand the flow of manufacturing costs: In a manufacturing environment, costs flow through various accounts as production progresses. These accounts include Raw Materials Inventory, Work in Process (WIP) Inventory, Finished Goods Inventory, and finally, Cost of Goods Sold (COGS).

Recognize the role of the Work in Process (WIP) Inventory account: This account is used to accumulate all manufacturing costs (direct materials, direct labor, and manufacturing overhead) for products that are partially completed during the production process.

Identify the stage of production: When production is ongoing and products are not yet completed, the associated costs are recorded in the Work in Process Inventory account. This ensures that costs are properly tracked until the products are finished.

Differentiate from other accounts: Costs are added to the Raw Materials Inventory account when materials are purchased, to the Finished Goods Inventory account when production is complete, and to the Cost of Goods Sold account when the goods are sold. However, during production, costs are specifically added to the Work in Process Inventory account.

Conclude the correct answer: Based on the flow of costs and the role of each account, the correct account for accumulating manufacturing costs during production is the Work in Process Inventory account.