Question

Inventory is often reported as a miscellaneous expense on the income statement. reported as a current asset on the balance sheet. generally valued at the price for which the goods can be sold. reported under the classification of Property, Plant, and Equipment on the balance sheet.

Answer 1

Answer:

reported as a current asset on the balance sheet.

Explanation:

According to US GAAP, inventory must be reported at lower of cost or market value. ⇒ Therefore, "generally valued at the price for which the goods can be sold." is wrong.

Inventory is included under current assets since it is considered relatively liquid. ⇒ Therefore, "reported under the classification of Property, Plant, and Equipment on the balance sheet." is wrong.

Inventory is not an expense, cost of goods sold is an expense account.  ⇒ Therefore, "reported as a miscellaneous expense on the income statement." is wrong.