On the financial statements prepared at the end of an accounting period, the merchandise inventory is shown as
A)an addition to capital on the statement of owner's equity.
B)a liability on the balance sheet.
C)revenue on the income statement.
D)an asset on the balance sheet.

Question

Quizplus · Accepted Answer

Merchandise inventory represents goods that a company has on hand and intends to sell to customers. As such, it is considered an asset on the balance sheet as it has economic value and can generate future cash inflows.

On the Financial Statements Prepared at the End of an Accounting