Select the correct answer.

Which function relates to maintaining merchandise inventory?

A.

accounting

B.

production

C.

finance

D.

human resource

B. production

Explanation:

Merchandise inventory refers to the finished and available goods the business has for sale. For a manufacturing firm, merchandise inventory will mean the goods that have completed the manufacturing process and are awaiting sales. In the books of accounts, merchandise inventory is accounted for as current assets.

The production department is the unit tasked with ensuring that the business has a continuous flow of merchandise inventory. As selling activities are continuous, the production unit must keep up the pace by ensuring there is sufficient inventory for the sales team to sell.