Question:
Which of the following would not be reported as inventory?
(a) Land acquired for resale by a real estate firm
(b) Stocks and bonds held for resale by a brokerage firm
(c) Partially completed goods held by a manufacturing company
(d) Machinery acquired by a manufacturing company for use in the production process.
Inventory
Inventory means the stock of raw materials (RM), work in progress (WIP), and finished goods (FG) that can be further processed or sold. It is a current asset of a business. Inventory management also entails significant costs for inventory handling and storage.
Answer and Explanation:1
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(a) For a real estate company, the land is an inventory of goods available for sale.
(b) For a brokerage firm, bonds and stocks are inventory...
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