 Hello, in this lecture we will define Work in Process Inventory. According to fundamental accounting principles, while the 22nd edition, the definition of Work in Process Inventory is, account in which costs are accumulated for products that are in the process of being produced but are not yet completed, also called Cost of Goods in Process Inventory. When we're considering the Work in Process Inventory, we are considering a component of inventory that Support Accounting Instruction by clicking the link below, giving you a free membership to all of the content on our website, broken out by category, further broken out by course. Each course then organized in a logical, reasonable fashion, making it much more easy to find what you need than can be done on a YouTube page. We also include added resources such as Excel practice problems, PDF files, and more, like QuickBooks backup files, when applicable. So once again, click the link below for a free month membership to our website and all the content on it. Component being in a manufacturing company typically because we then need to break that inventory out to its components, those including raw materials, work in process, and finished goods. The process could look something like this. We're going to produce boats in this case. We would first start with the raw materials that we hope to convert into the finished product, the inventory, that being a boat, raw materials, going to be an asset. And it's part of the inventory in a way, but it's not quite a boat yet. We're going to take those raw materials, transfer them to where we're going to produce the boat. In terms of our ledgers, we're going to put that raw material into work in process. We're then going to include in the work in process of the boats, the maintenance that's going to be in there, the labor and the overhead. Then we're going to move from an accounting, the accounting of the inventory from work in process to finished goods. Once it has then been completed, finished goods is now the area which is most like the wholesaler that has the inventory on the books that's just purchasing and selling the inventory in that the finished goods inventory is now the goods that is able to sell, ready for sale. When we do sell it, we'll have a similar transaction as if we were just purchasing and selling inventory in that we will have to track the inventory in cost of goods sold, the related expense account as the finished goods inventories go down, cost of goods sold, the expense account goes up when we then give the finished goods to the final customer.