Finished Goods Inventory

Account Information

Financial Statement	Statement of Financial Position
Normal Balance	Debit

Finished goods ready for sale

Note: This account may be broken down into sub-ledgers as needed (e.g., customer/supplier/bank names or branches).

Finished goods transferred from production

Dr. Finished Goods Inventory
Cr. Cost of Production

Recorded cost of goods sold

Dr. Cost of Goods Sold
Cr. Finished Goods Inventory

Returned sold goods to inventory

Dr. Finished Goods Inventory
Cr. Cost of Goods Sold

Damaged finished goods written off

Dr. Loss on Damaged Goods
Cr. Finished Goods Inventory

IFRS IAS 2 Inventories

US GAAP ASC 330 Inventory

Q: What is finished goods inventory?

A: Products that have been fully manufactured and are ready for sale to customers.

Q: How is finished goods cost transferred to cost of goods sold?

A: When the product is sold, its value is transferred from finished goods inventory to cost of goods sold.