merchandise inventory is

merchandise inventory is a key concept in accounting and retail that refers to the goods a company holds for the purpose of selling them. Merchandise inventory includes items that are ready for sale to customers, but it does not include products that are in production or raw materials. Proper management of merchandise inventory is crucial for businesses, as it affects cash flow, sales, and profit margins. Inventory is tracked through accounting methods such as periodic and perpetual systems, which help businesses determine the cost of goods sold (COGS) and make informed purchasing and sales decisions. Keeping an accurate record of merchandise inventory ensures that businesses can fulfill customer orders promptly while maintaining healthy profit margins.