Question

Commodity purchased or produced for sale is known as ____________ .

• A. Goods
• B. Machinery
• C. Land
• D. None of the above

Answer 1

Answer: (A)

Goods

Goods refer to the products in which the business units is dealing, i.e in terms of which it is buying and selling or producing and selling. The items that are purchased for use in the business are not called goods. For example, for a furniture dealer purchase of chairs and tables is termed as goods, while for other it is furniture and is treated as an asset. Similarly, for stationary merchant, stationary is goods, whereas for others it is an item of expense (not purchases).