Difference Between Raw Material and Inventory Account

[Former Member]

Hi Experts,

can you pls explain me the difference between raw material account and inventory account opened under Asset Drawer in Chart Of Account ??

[Former Member · Accepted solution]

Hi Divya.......

There is no difference between raw material and inventory account. Infact the raw material is nothing but stock and stock includes the finished semifinished product also. In short the stock account belongs to the category inventory account.......

Regards,

Rahul

[Former Member]

Hi!

Raw material normally refers to the items which given as a input to get a Finished Product.

Inventory refers to the stock which includes all your Raw,WIP,FG,Scrap everything which is inventrised

[Former Member]

Hi,

Raw Material account is usually under COGS drawer. What is your localization?

Thanks,

Gordon

[Former Member]

Our localization is Indian

[Former Member]

Rahul's answer is basically correct. The only difference is: Raw Material is only one type of the Inventory Account. It covers less than the Inventory concept.