What are finished goods?

Finished goods are items that have been completed during the manufacturing process and are ready for sale to consumers. These goods have gone through all necessary production stages and are now considered final products. This means they are distinct from products that are still in production or those that require further processing.

The correct understanding of finished goods implies that they have already left the production area and are available for purchase, fully manufactured and packaged. This classification is crucial in inventory management, as finished goods are typically counted separately from raw materials or work-in-progress items.

In the context of the other options, products that have been returned or not yet sold do not qualify as finished goods since they have not entered the market in a consumer-ready state. Additionally, goods used for further processing and items still in production are clearly active parts of the production cycle and do not meet the criteria for being considered finished. Therefore, focusing on the characteristics of finished goods clearly indicates that they are units of product that are ready for sale, which aligns with the definition attributed to the correct choice.