Final answer:
Inventory is a current asset listed on a company's balance sheet, comprising unsold goods, and fluctuating based on business performance and consumer demand.
Step-by-step explanation:
Inventory is classified as a current asset on a company's balance sheet. It is a small but significant category that includes goods produced by a business but not yet sold to consumers. Inventories are found on the balance sheet under the section for current assets.
These goods are typically held in warehouses and on store shelves. Inventory levels are tied to the performance of a business and can provide valuable insight into economic trends and business expectations. They tend to decline when business is performing well and demand is high, or increase when sales are slower than anticipated.