Inventories

The term inventories refers to the aggregate amount of all goods kept on-hand by a business. This includes all classifications of inventory, such as:

  • Raw materials
  • Work-in-process
  • Finished goods
  • Merchandise

Inventories are intended to be sold in the ordinary course of business, so this classification does not include assets that are being used for internal purposes, and which may be sold off at a later date.

Inventories are usually classified as a current asset, since the intent is to sell them within one year.

Related Courses

Accounting for Inventory 
How to Audit Inventory