Question

How is inventory classified on the financial statement?

Answer 1

(A) As an asset

(B) As a liability

(C) As a revenue

(D) An expense

Answer (A): As an asset

Explanation: An inventory or stock is an asset on the grounds that an organization puts cash in it, converts the stock into products at that point, changes over into income when it sells the stock. Stock that doesn’t sell as fast as expected might turn into responsibility and liability.

Also see: Financial Statements MCQs