Why Is Inventory Reported as a Current Asset

question 195

Multiple Choice

Why is inventory reported as a current asset?

• A) Inventory is reported as a current asset because it will be converted into cash within a year of the balance sheet date.
• B) Inventory is not reported as a current asset.
• C) Inventory is not a current asset; it is a noncurrent asset because inventory is often sold on account and not for cash.
• D) Inventory is reported as a current asset because it has been sold.

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Definitions:

Marketing Strategy

A comprehensive plan formulated to achieve the marketing objectives of an organization, which includes target market identification and applying the marketing mix effectively.

Diversification

The strategy of expanding into new markets, products, or services to reduce risk and enhance potential for growth.

Situation Assessment

An evaluation process to understand the current conditions and factors affecting a decision or strategy.

Strategic Marketing

Strategic marketing is the long-term approach to planning, executing, and managing marketing efforts that align with a business's overall goals and objectives, focusing on sustainable growth and competitive positioning.