Which of the following statements is TRUE of a company's inventory?
A) It is an example of a long-term asset that companies hold.
B) It is the most liquid current asset of a company.
C) It has the potential to be converted to cash.
D) It is classified under accounts receivable.
E) It is not associated with costs when it is waiting to be sold.

Question

Quizplus · Accepted Answer

A)Inventory has the potential to be converted to cash but must be sold first. It represents a cost while it's sitting there waiting to be sold.
B)Inventory has the potential to be converted to cash but must be sold first. It represents a cost while it's sitting there waiting to be sold.
C)Inventory has the potential to be converted to cash but must be sold first. It represents a cost while it's sitting there waiting to be sold.
D)Inventory has the potential to be converted to cash but must be sold first. It represents a cost while it's sitting there waiting to be sold.
E)Inventory has the potential to be converted to cash but must be sold first. It represents a cost while it's sitting there waiting to be sold.

Which of the Following Statements Is TRUE of a Company's