Final answer:
The salaries of production workers are accumulated in an inventory account rather than immediately expensed because the matching principle in accounting dictates that expenses should be recognized when the revenue they help to generate is realized. This happens as the inventory is sold, and the costs become part of the cost of goods sold.
Step-by-step explanation:
The reason why the salaries of production workers are accumulated in an inventory account instead of being expensed on the income statement is due to the accounting principle known as matching principle. This principle requires that expenses be matched with the revenues they help to generate. In the context of inventory, the costs associated with producing goods, including the wages of production workers, are considered product costs and are capitalized as inventory. These costs are then expensed as part of cost of goods sold (COGS) when the inventory is sold, reflecting the transfer of cost from inventory to expenses in line with revenue recognition.
This approach aligns with how Gross Domestic Product (GDP) calculations exclude intermediate goods to prevent overstating the size of the economy. Just as GDP calculations focus on the final value of goods and services, accounting for production worker salaries focuses on the final contribution of these salaries to the production of goods, deferring the recognition of these costs until the final product is sold.