Answer to Question #256038 in Management for Nicky

Question

Using the table below, compile an ABC analysis: (5)

Stock

Number

Quantity Rand

Value

J24 1682 15.25

R26 889 88.50

L02 2546 1.30

M12 2038 6.50

P33 10385 0.65

T72 4167 13.50

S67 2000 7.90

Q47 5990 0.50

V20 4375 2.80

Is inventory an asset or a liability? Justify your answer.

Answer 1

While stock is a resource formally, it can frequently feel more like a risk. For instance, despite the fact that resources, for example, stock are characterized as "things of monetary worth", hardly any entrepreneurs are amped up for having abundance stock. To get a handle on this resource responsibility duality, one should comprehend the distinction between stock, which means the items or unrefined substances themselves, and the expense of holding it.In the field of monetary bookkeeping, stock is characterized as the rundown of items and materials that a business both claims and actually has. Stock on the monetary record alludes to the joined assessed reasonable market cost for every thing. In any case, this figure does exclude the value the business paid to gain the things or the expense to produce, keep up with or transport those things. 

The things held by retailers — completed merchandise available to be purchased — address just one sort of stock. Makers and wholesalers have extra stock classes known as: 

Natural substances like metal minerals, plastics, wood, glass, parts and gadgets 

Work in process meaning to some degree finished parts 

Unrefined substances that have been pre-stacked into the production network 

Products for resale, a classification that involves returned or utilized merchandise that can be exchanged