The merchandise inventory is reported as an asset until it is sold.

Name: The merchandise inventory is reported as an asset until it is sold.
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Question

Quizplus · Accepted Answer

The merchandise inventory is purchased by the business for the purpose of selling it to customers. It is considered an asset as it has value for the business until it is sold. Once it is sold, it is removed from the balance sheet and is reported as a cost of goods sold on the income statement.

The Merchandise Inventory Is Reported as an Asset Until It