Question

Which of the following statements about the types of inventory is (are) correct?

1) Inventory can be classified as raw materials, work-in-progress, and finished goods.
2) Raw materials inventory includes items that are used directly in the production process.
3) Work-in-progress inventory includes partially completed products.
4) Finished goods inventory includes products that are ready for sale.
5) Option E: All of the above statements are correct.

Answer 1

Inventory can be classified into raw materials, work-in-progress, and finished goods.

Step-by-step explanation:

Statement 1: Inventory can be classified as raw materials, work-in-progress, and finished goods.

Statement 2: Raw materials inventory includes items that are used directly in the production process.

Statement 3: Work-in-progress inventory includes partially completed products.

Statement 4: Finished goods inventory includes products that are ready for sale.

Based on the information provided, all of the above statements are correct. Inventory can indeed be classified into raw materials, work-in-progress, and finished goods. Raw materials inventory includes items that are directly used in the production process, work-in-progress inventory includes partially completed products, and finished goods inventory includes products that are ready for sale.