BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Add opening WIP and closing WIP
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Subtract opening WIP and add closing WIP
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Add opening WIP and subtract closing WIP
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Subtract opening WIP and closing WIP
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Detailed explanation-1: -A work-in-progress (WIP) is the cost of unfinished goods in the manufacturing process including labor, raw materials, and overhead. WIPs are considered to be a current asset on the balance sheet.
Detailed explanation-2: -Work in progress (WIP), also called work in process, is inventory that has begun the manufacturing process and is no longer included in raw materials inventory, but is not yet a completed product. On a balance sheet, work in progress is considered to be an asset because money has been spent towards a completed product.
Detailed explanation-3: -What is a work-in-progress journal entry? A work-in-progress journal entry is a record that accounting professionals use to document current assets on a company’s balance sheet. The items in this journal entry don’t include any raw materials or finished goods.
Detailed explanation-4: -Work in progress (WIP) This is the term used to describe units that are not yet complete at the end of the period. Opening WIP is the number of incomplete units at the start of a process and closing WIP is the number at the end of the process.