International Association of Accessibility Professionals (IAAP) Certified Administrative Professional (CAP) Practice Exam

What does inventory refer to in a business?

1. A periodic listing of liabilities

2. A list of owned assets including merchandise

3. A financial statement summarizing income

4. A type of investment portfolio

The correct answer is: A list of owned assets including merchandise

Inventory in a business primarily refers to a comprehensive list of all owned assets that include merchandise and products available for sale. This encompasses not only the goods that a company sells directly to consumers but also the raw materials and components needed for production. Managing inventory effectively is crucial for maintaining operational efficiency, ensuring that a company can meet customer demand without overstocking or understocking. In contrast, the other options do not represent the concept of inventory accurately. A periodic listing of liabilities is more aligned with financial statements and assesses what a company owes. A financial statement summarizing income focuses on revenue and expenses rather than assets or inventory. Lastly, a type of investment portfolio typically pertains to financial instruments such as stocks and bonds, which is unrelated to the physical stock of goods or assets within a business context.