which of the following is merchandise inventory

which of the following is merchandise inventory is a common question for business owners and accountants trying to understand the classification of assets for financial reporting. Merchandise inventory consists of goods that are held for sale to customers in the ordinary course of business. Examples include raw materials, work-in-progress goods, and finished products. This inventory is crucial for calculating a company’s cost of goods sold (COGS), which impacts profitability. Businesses must track merchandise inventory carefully to ensure accurate financial reporting and proper tax compliance. Effective inventory management can help optimize cash flow and minimize excess stock, which ultimately improves business efficiency and profitability.