When comparing balance sheets, which type of company has a significant materials inventory?

Question

Quizplus · Accepted Answer

A manufacturing firm typically has a significant materials inventory due to the need for raw materials to produce their products. Service firms do not typically have large amounts of materials inventory, and while merchandising firms may have some inventory, it is typically in the form of finished products rather than raw materials.

When Comparing Balance Sheets, Which Type of Company Has a Significant