Asked by Nohely Ortiz on May 21, 2024
Verified
Inventory is
A) reported under the classification of Property Plant and Equipment on the balance sheet.
B) often reported as a miscellaneous expense on the income statement.
C) reported as a current asset on the balance sheet.
D) generally valued at the price for which the goods can be sold.
Current Asset
A current asset is a resource owned by a company that is expected to be converted into cash, used, or consumed within one year or within the operating cycle of the business.
Balance Sheet
The balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time, showing assets, liabilities, and shareholders' equity.
Inventory
The cumulative inventory of materials and products that a business maintains for the goal of selling or using in production.
- Comprehend the categorization and assessment of inventory within the balance sheet.
Verified Answer
5F
5sosfan fics1996May 21, 2024
Final Answer :
C
Explanation :
Inventory is reported as a current asset on the balance sheet, representing the value of goods that a company has on hand and available for sale to customers. It is not reported under Property Plant and Equipment (A) as these are long-term assets used in a company's operations. Inventory is not typically reported as a miscellaneous expense on the income statement (B), as it is considered a cost of goods sold and is accounted for separately. Lastly, the value of inventory is generally reported at cost (e.g., FIFO or LIFO), rather than the price for which the goods can be sold (D).
Learning Objectives
- Comprehend the categorization and assessment of inventory within the balance sheet.