Finished goods inventory is reported on the a. balance sheet as a long-term asset b. balance sheet as a current asset c. income statement as revenue d. income statement as a period cost g

Question

Krish

Business

12 December, 10:10

Finished goods inventory is reported on the a. balance sheet as a long-term asset b. balance sheet as a current asset c. income statement as revenue d. income statement as a period cost g

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Answers (2)

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Brennan Mcdonald · Answer 1

The correct answer is letter "B": balance sheet as a current asset.

Explanation:

Finished goods inventory includes all those goods that do not need any more manufacturing or goods that were purchased already finished - merchandise - but have not been sold yet. Finished goods on the Balance Sheet are considered current assets because it is expected they will be sold in less than 1 year.

Nichols · Answer 2

The answer is B. balance sheet as a current asset

Explanation:

Finished goods inventory is a current asset and assets are reported under balance sheet.

Current asset like finished goods inventory is an inventory that will or should be sold within a year.

Inventory is not a non-current asset. Non-current asset has more than a year as life span e. g machinery, equipment etc.

Option C and D are wrong because inventories are neva reported on income statement.