Finished goods inventory

Finished goods are goods that have been completed by the manufacturing process, or purchased in a completed form, but which have not yet been sold to customers. Goods that have been purchased in completed form are known as merchandise.

The cost of finished goods inventory is considered a short-term asset, since the expectation is that these items will be sold in less than one year. The total amount of finished goods inventory on hand as of the end of a reporting period is typically aggregated with the costs of raw materials and work-in-process, and is reported within a single "Inventory" line item on the balance sheet.

Related Courses

Accounting for Inventory 
How to Audit Inventory 
Inventory Management
The Balance Sheet