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U.S. GAAP Codification | Accounting Topics |
Accounting Terms Dictionary |
Principles of Accounting, U.S. GAAP Financial Reporting Guide |
Accounting by Topic, Accounting Terms Dictionary |
Accounting Terms Dictionary |
Classification of inventory |
Classification of inventory Inventory items are classified based on --> where they are in the production process 1. Merchandise --> goods purchased from other entities --> for the purpose of reselling to customers 2. Raw materials --> materials and parts purchased from other entities --> for the purpose of using them in the production process 3. Work in process --> materials and parts currently in the production process 4. Finished goods --> goods that completed the productions process --> goods that are ready for sale to customers |
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