Change in the inventory of a firm is treated as ______

This question was previously asked in
SSC MTS (2022) Official Paper (Held On: 18 May, 2023 Shift 2)
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  1. Disinvestment 
  2. Investment 
  3. Liability 
  4. Asset 

Answer (Detailed Solution Below)

Option 2 : Investment 
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SSC MTS 2024 Official Paper (Held On: 01 Oct, 2024 Shift 1)
90 Qs. 150 Marks 90 Mins

Detailed Solution

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The correct answer is Investment.Key Points

  • Change in inventory is treated as an investment because it represents the amount of money the firm has tied up in its inventory.
  • Inventory is considered an asset because it can be sold for a profit, and it is an important part of a firm's operations.​

Additional Information

  • Disinvestment refers to the sale of assets, such as property, equipment, or investments.
  • Liability refers to debts or obligations owed by a firm, such as loans or accounts payable.
  • Asset refers to any resource that is owned by a firm and has value, such as property, equipment, or inventory.

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