The correct answer is D. All the above.
Inventory is a term used in accounting to describe the goods and materials that a company owns and intends to sell. It includes raw materials, work in progress, and finished goods.
Raw materials are the basic materials that a company uses to produce its products. They may include things like lumber, steel, or chemicals.
Work in progress is the partially completed products that a company is in the process of manufacturing.
Finished goods are the completed products that a company has ready to sell.
Inventory is an important asset for a company. It represents the goods that a company has available to sell, and it can have a significant impact on a company’s financial performance.
A company’s inventory management system is responsible for tracking the movement of inventory, ensuring that it is properly stored, and ordering new inventory when necessary.
Inventory management is a complex task, and it is important for companies to have a well-functioning system in place. A poorly managed inventory can lead to lost sales, increased costs, and even financial problems.
Here are some additional details about each of the three types of inventory:
- Raw materials: Raw materials are the basic materials that a company uses to produce its products. They may include things like lumber, steel, or chemicals. Raw materials are typically stored in a warehouse or other storage facility until they are needed in the production process.
- Work in progress: Work in progress is the partially completed products that a company is in the process of manufacturing. Work in progress is typically stored in a warehouse or other storage facility until it is completed and ready to be sold.
- Finished goods: Finished goods are the completed products that a company has ready to sell. Finished goods are typically stored in a warehouse or other storage facility until they are sold to customers.
Inventory management is a critical part of running a successful business. By effectively managing inventory, companies can reduce costs, improve efficiency, and increase sales.