What is Inventory

 An inventory is the collection of unsold products awaited to be depleted or list of tangible goods or the intangible attributes or qualities. In the company balance sheet the Inventory recorded as the current asset. An organization holds the inventory to support the production activities such as the raw material sub assemblies and work in progress. Companies and other businesses also use inventory for the repair, maintenance, consumables support activities as according to their business demand. Inventory can found in the form of finish goods or spare parts, In the any organization final reports we can see that the inventory is often the largest item in the current asset category. online mobile accessories shopping in Pakistan  

At end of each accounting period if the inventory is accurately counted and is valued we can check the company profit and loss. To maintain the record accurately many organization generally keep the record on the daily basis. Any change occurs in the inventory called the perpetual inventory method.  stock, goods, merchandise are include in the inventory . Inventory are  assets, those products, those things of value, that you either buy from another or make your product, that you then sell on to someone else. In other words we can say that any business which hold the inventory with the desire for sale the products to the consumer to earn the profit. if we talk about the inventory in detail there should be three things in mind to account the asset as the business inventory. First the inventory such as the assets must be part of the company’s primary business. For example, a sandwich shop’s use a truck for the delivery is not express inventory because it has annihilation to do with the primary business of making and selling sandwiches. The truck which use for the delivery is considered a fixed asset for the sandwich shop. In the other scenario such as the car dealership this truck would be considered as the inventory because they are in business of selling vehicles. Second, the assets listed as the inventory must be accessible for sale or will soon be ready to sell. If any business have assets and desire to be sold but are never actually made available for sale, they are not categories as the inventory. These are just assets of the business or investments of the company. Third, the purpose of any business occupy the asset must be to sell them to customers then it listed as the inventory. Going back to our sandwich shop example, the truck was not hold to be sold to a customer. It was acquire to deliver sandwiches and was sold when it couldn’t perform that job. The car dealership, on the other hand, purchases vehicles for the sole plan of reselling them. Thus, the truck is considered inventory of this business.