Question

Which of the following activities results in work-in-process moving to finished goods inventory? LO 7-1

a. Authorize production
b. Inspect work
c. Complete production
d. Issue raw material
e. None of the above

Answer 1

The activity that results in work-in-process moving to finished goods inventory is 'Complete production'. Other listed activities such as authorizing production, inspecting work, and issuing raw materials are steps in the process but do not signify the transfer to finished goods.

Step-by-step explanation:

The student's question is related to the accounting process in manufacturing businesses, specifically the stage at which work-in-process (WIP) becomes finished goods inventory. The correct answer to 'Which of the following activities results in work-in-process moving to finished goods inventory?' is Complete production. Authorization of production (a), inspecting work (b), and issuing raw material (d) are all important steps in production, but it is the completion of production that signifies the movement of goods from the work-in-process category to finished goods inventory. This is because once products have been fully assembled, inspected, and deemed ready for sale, they are no longer in the process of being worked on and thus, become part of the finished goods inventory.