
Concept explainers
Concept Introduction:
1. Work in Process: Work in Process refers to the goods in production process which is not yet completed. This includes cost of raw material, labour and manufacturing
2. Finished Goods : Finished goods are the goods which have completed the production process and are ready for sale.
3. Cost of Goods Sold: Cost of goods sold is the direct cost attributable to the product sold by company. It includes cost of raw material, direct labour and overhead.
4. T Account: A T-account is the graphical representation of a general ledger that records business transactions. T Account looks like the letter T, where Debit entries are recorded at the left side and credit entries recorded at right side and account title will be at the top.
The Rules for preparing the T-Shape Accounts is mentioned below:
Nature of Account | Debit Side | Credit Side |
---|---|---|
Asset Account | Increases | Decrease |
Liabilities Account | Decreases | Increase |
Revenue Account | Decreases | Increase |
Expenses Account | Increases | Decrease |
Capital Account | Decreases | Increase |
To Calculate:
a. Work in Process inventory as on July 31
b. Finished Goods Inventory at July 31.
c. Cost of Goods Sold for July

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Chapter 19 Solutions
Horngren's Accounting, The Financial Chapters (11th Edition) - Standalone Book
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