Inventory Held by a Business Is A(n)________ and When Sold

question 171

Multiple Choice

Inventory held by a business is a(n) ________ and when sold becomes a(n) ________.

• A)liability; withdrawal
• B)asset; expense
• C)liability; asset
• D)asset; contra asset

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Definitions:

Factoring

Factoring is a financial transaction where a business sells its accounts receivable to a third party, called a factor, at a discount.

Pledging

Offering an asset as security or collateral for a debt obligation.

Assigning

The process of allocating or appointing a particular task, responsibility, or resource to a specific entity or individual.

Cash Inflows

Money or equivalent value received by an entity, typically as a result of its business operations, investments, or financing activities.