How do you account for wip?

Work in Progress (WIP) is accounted for by tracking the costs associated with partially completed goods in a manufacturing or production setting. These costs typically include raw materials, labor, and overhead expenses incurred up to the reporting date. WIP is recorded on the balance sheet as a current asset, and its value is adjusted as production progresses, converting it to finished goods once completed. Proper accounting for WIP helps in accurately assessing inventory levels and determining the cost of goods sold.