is merchandise inventory an asset

is merchandise inventory an asset is a key accounting concept. Merchandise inventory is considered a current asset on a company’s balance sheet because it represents goods that are available for sale or will be sold within the normal operating cycle. It includes products that a business has purchased or manufactured but not yet sold. Inventory is classified as an asset because it is expected to generate revenue when sold. Proper inventory management is crucial for businesses to maintain cash flow and profitability.