Cost accounting

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Meekha (Querist)
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04 August 2009 Sir/Madam,
Under WIP, I am coming across terms like Capital WIP, WIP, etc. Can any one please explain me what all types of WIP are there and how they are used with examples? I am thoroughly confused with this. Please, can any one help me?

CA Nitish Jain

CA Nitish Jain (Expert)
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13 August 2009 WIP can be for production of goods we trade or for procurement/construction of fixed asset.

For a factory of computers, the computers, that are in the course of production on the last day of the accounting year, will be WIP of goods.

If in the same factory, new plant is being installed and as on last day of the accounting year, it is not complete, it will be Capital WIP.