Pepperidge Farm stores items like flour, salt, and sugar as raw materials it will use to produce a variety of food items. These raw materials are listed as which of the following on the company's balance sheet?
A) equipment
B) owner's equity
C) short-term loans
D) liabilities

Question

Quizplus · Accepted Answer

Raw materials like flour, salt, and sugar used in production are considered part of a company's inventory, which is an asset, not equipment, owner's equity, short-term loans, or liabilities. However, the correct classification for these items would actually be inventory under current assets, not equipment. My initial response was incorrect in specifying equipment as the right choice. Raw materials are indeed assets but should be specifically categorized under inventory.

Pepperidge Farm Stores Items Like Flour, Salt, and Sugar as Raw