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Questions and Answers
How do accountants view 'inventory'?
How do accountants view 'inventory'?
- A way of raising capital
- The total value of an organization’s assets
- The list of items held in stock
- The amount of money tied up in stocks (correct)
What do organizations refer to their stock as, according to the text?
What do organizations refer to their stock as, according to the text?
- Provisions
- Shares
- Assets
- Stores (correct)
What do finance people consider 'stocks' to be?
What do finance people consider 'stocks' to be?
- The amount of money tied up in stocks
- A way of raising capital (correct)
- The list of items held in stock
- The total value of an organization’s assets
What has become more common in recent years regarding the use of 'inventory'?
What has become more common in recent years regarding the use of 'inventory'?
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What is an inventory according to the standard definitions mentioned in the text?
What is an inventory according to the standard definitions mentioned in the text?
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Study Notes
Inventory and Stock
- In the context of accounting, 'inventory' refers to goods or materials held for sale, in production, or in the process of being manufactured.
- Organizations often refer to their stock as 'merchandise', 'goods', or 'products'.
- In finance, 'stocks' typically refer to shares of company ownership, not goods or materials.
- In recent years, it has become more common for the terms 'inventory' and 'stock' to be used interchangeably, although they have distinct meanings in different contexts.
- According to standard definitions, an inventory is a list of goods or materials held by a business, including their quantity, condition, and value.
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