Raw materials inventory definition. Analyzing the definition of key terms often provides more insight about concepts. Raw materials inventory can be defined as – Good a company acquires to use in making products. Raw materials in an inventory account used in a manufacturing company, used for the tracking of inventory through the production process. Inventory generally starts as raw materials, then moves to work in process, then moves to finished goods. When the inventory is sold, it is reduced from finished goods and record as an expense in the cost of goods sold account. Raw materials inventory represents inventory that has not yet been started on, or moved to work in process.
