Asked by Cassie Owens on Jul 09, 2024
Verified
Inventory is classified on the balance sheet as a
A) current liability
B) current asset
C) long-term asset
D) long-term liability
Current Liability
Financial obligations due by a company within a year, including loans, accounts payable, and other short-term debts.
Current Asset
Assets that are expected to be converted into cash, sold, or consumed within one year or within the normal operating cycle of the business, whichever is longer.
- Identify and classify inventory on the balance sheet.
Verified Answer
KW
Kellin Wong Kai XinJul 15, 2024
Final Answer :
B
Explanation :
Inventory is considered a current asset because it is expected to be sold or used up within a year or less. It represents a company's stock of goods available for sale, including raw materials, work-in-progress, and finished goods.
Learning Objectives
- Identify and classify inventory on the balance sheet.