Which of the following is NOT a type of inventory commonly recognized in accounting?

• A. Work-in-process
• B. Raw materials
• C. Accounts receivable
• D. Finished goods

Answer: (C)

Verified step by step guidance

1. Understand the concept of inventory in accounting: Inventory refers to assets that are intended for sale, production, or use in manufacturing processes. Common types of inventory include raw materials, work-in-process, and finished goods.
2. Define each type of inventory: Raw materials are the basic inputs used in production. Work-in-process refers to partially completed goods still undergoing production. Finished goods are completed products ready for sale.
3. Recognize that accounts receivable is not inventory: Accounts receivable represents money owed to the company by customers for goods or services already delivered. It is classified as a current asset but not as inventory.
4. Compare accounts receivable to inventory: Inventory is tangible and directly related to production or sales, while accounts receivable is intangible and represents a financial claim.
5. Conclude that accounts receivable is NOT a type of inventory commonly recognized in accounting, as it does not fit the definition or purpose of inventory.