Which of the following statements regarding inventory classifications is not true?
A)Inventory may include materials used in producing goods for sale.
B)Companies that are manufacturers list their finished goods,work-in-process and raw materials inventory separately.
C)Inventory is classified as a long-term asset on the balance sheet.
D)Merchandisers buy inventory in finished form ready for resale.

Question

Quizplus · Accepted Answer

Inventory is classified as a current asset on the balance sheet, not a long-term asset. Current assets are expected to be converted to cash within one year or the operating cycle, whichever is longer. Long-term assets, on the other hand, are expected to be held for more than one year.

Which of the Following Statements Regarding Inventory Classifications Is Not