Inventory Is a Component Of

question 7

Multiple Choice

Inventory is a component of:

• A) current assets.
• B) current liabilities.
• C) equity.
• D) fixed assets.

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Definitions:

Chart of Accounts

A systematic list of all accounts used by an organization, essential for organizing financial information and preparing financial statements.

Merchandising Business

A commercial enterprise that purchases goods in a finished condition for the purpose of resale without further manufacturing.

Contra Accounts

Accounts used in the accounting ledger to reduce the value of a related account when the two are netted together.

Perpetual Inventory

An inventory management system where updates are made continuously as inventory items are bought and sold.