The correct answer is: C. Finished goods inventory
Finished goods inventory is the inventory of a finished product that a company has available for sale. It is the final stage of inventory, after raw materials have been converted into a finished product and after any work-in-process inventory has been completed. Finished goods inventory is typically held in a warehouse or distribution center until it is sold to customers.
Raw materials inventory is the inventory of raw materials that a company has on hand for use in the production of its products. Raw materials are the basic ingredients that are used to create a finished product. They can include things like lumber, metal, chemicals, and fabric. Raw materials inventory is typically stored in a warehouse or on-site at the production facility.
Work-in-process inventory is the inventory of partially completed products that a company has on hand. Work-in-process inventory is created when raw materials are converted into a finished product. It is the inventory that is in the process of being manufactured. Work-in-process inventory is typically stored in a warehouse or on-site at the production facility.
Manufacturing inventory is a general term that refers to all of the inventory that a company has on hand for use in the production of its products. This includes raw materials inventory, work-in-process inventory, and finished goods inventory.
The inventory account of a merchandising company is similar to finished goods inventory. Merchandising companies sell products that they have purchased from other companies. They do not manufacture their own products. As a result, they do not have raw materials inventory or work-in-process inventory. Their only inventory is finished goods inventory.