Inventories

Inventory is an existing asset whose closing balance should report the cost of a merchant's products waiting to be sold. A manufacturer's inventory should report the cost of raw materials, work in progress, and finished goods. The cost of inventory should include all costs necessary to obtain the items and prepare them for sale.

- Used to explain the concept in accounting and business contexts.
- Used when training staff or documenting procedures and policies.

- Example: Teams reference **Inventories** when defining terms in manuals, policies, or training materials.

- Why it matters: Improves clarity and consistency across documentation and decision-making.