What are the finished goods?

"finished goods" are products that have undergone all production processes, but have not yet sold. Completed good can serve as a piece of inventory for a shop or sit in a warehouse in a warehouse. The finished goods do not earn money for the company until it is purchased, even if they are calculated as assets.

There are three names for the product when they undergo a production process. "Raw materials" are used to produce the final product. The "unfinished goods" have not yet completed the production process. "Cone goods" are the third and last phase of production if there is no need to work on the product. Something like orange is not considered a finished good, even if it is sold and sent. However, orange juice requires processing and will be listed as completed good.

In accounting, finished goods are used to calculate profits. When the finished goods are not yet sold, IT is registered in the balance sheet as a debt. It is a credit after sale. At the end of the fiscal period, the difference between the goods sold and the goods in the inventory is calculated. This resulting numbero is a gross profit of business.

Calculation of the cost of finished goods is an important part of the start of successful business. The amount of time required for production and cost of raw materials and work is all the elements to be considered. If the cost of any of these elements is larger than the price for the final product, you will need to find cheaper alternatives. Otherwise, the company can go into debt or fail.

Because they do not create any profit until it sells, some manufacturers have developed the transport process "just in time" to be sold immediately than to sit on the floor of the warehouse. Businesses hold the sale and create CE prispens to circulate their finished goods in stores. On the contrary, goods that have not been sold are also calculated in the total assets of the company. Although not sold yet, the total value of the finished goods is used when it increases overall how much business costs. This can help predict future PEnural flows or to be compared with past assets to assess the growth of society.