Finished Goods are costs you associate with your arts and crafts products that are completely ready for sale to customers, but have not yet been sold. For example, if you handcraft furniture, finished goods inventory includes all furniture completely finished, not including furniture that is almost done or any of the raw materials you use to make the furniture.
Figuring Ownership of Finished Goods
Obviously, any finished goods that haven't been matched with a customer are part of your arts and crafts inventory. However, suppose the finished goods have a buyer and are boxed and waiting for the UPS of FEDEX driver to pick them up. Who owns the finished goods then?
It depends on whether the terms of the sale are for Free on Board (FOB) shipping point or FOB destination. The question here is whether your customer or you pay for the shipping and loading costs. Customer pays, the ownership transfers from you to the customer when package pick-up occurs.