Many of the items that a firm stocks in inventory are generic regardless of the kind of business it engages in. This statement is FALSE.
All the goods, merchandise, and supplies that a company keeps on hand in anticipation of selling them for a profit are referred to as inventory.
Example: Only the newspaper will be regarded as inventory if a newspaper vendor utilizes a vehicle to distribute newspapers to clients. The car will be considered an asset.
Both the products that are on hand for sale and the raw materials required to make those products are considered inventory. The three different categories of inventory are raw materials, finished commodities, and work-in-progress. As items are produced or acquired as needed, inventory management enables organizations to reduce inventory expenditures.
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