Question

Should small businesses be required to keep "inventory" in their books as an asset? Why or why not?

Should such small businesses receive special treatment? Why or why not?

Answer 1

Small businesses have to keep "inventory" in their books as an asset because inventory are the goods for sale or in storage small business has. The raw material used for producing finished goods, items yet to be produced, and finished goods are included in the inventory. inventory for small businesses should be considered an asset. An asset is a property that adds value to the business. In the balance sheet of small business, inventory should be recorded as a current asset. The assets which can be converted in cash within a year are called current assets.

Small businesses should receive special treatment because inventory management is important for small businesses. Inventory is the life cycle of the business.