Question

Which of the following is merchandise inventory?

1) goods held for sale in the normal course of business
2) raw materials and work in process
3) office supplies that a company plans to use in the next few months
4) equipment used to manufacture products which will be sold later

Answer 1

The correct answer to which item is considered merchandise inventory is goods held for sale in the normal course of business. This is because merchandise inventory is designed to be sold to customers, unlike raw materials or manufacturing equipment.

Step-by-step explanation:

Merchandise inventory refers to goods held for sale in the normal course of business.

Therefore, the correct answer to the question of which of the following is merchandise inventory is the first option: goods held for sale in the normal course of business.

This is because merchandise inventory is specifically those goods that a business intends to sell to customers.

Other options such as raw materials, work in process, office supplies, or manufacturing equipment do not fit the definition of merchandise inventory as they are either inputs used in the production process or assets used for operational purposes, rather than goods ready for sale.