Section I. Overview of Inventory
Q1. Inventory Defined
What is inventory?
The term inventory refers to the following types of assets:
(1) Raw materials
Raw materials will be used in production process in the future.
(2) Work-in-Process (WIP)
Work-in-process (WIP) is currently in the process of production.
(3) Finished goods
Finished goods are the output from production process.
Merchandise inventory was purchased from other entities for sale to customers.