Certified Supply Chain Professional (CSCP) Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the Certified Supply Chain Professional Exam with a comprehensive quiz featuring multiple choice questions and essential study material. Gain the knowledge and confidence needed to excel in your certification journey!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

True or False: Inventory is considered an asset until it is sold, at which point it contributes to net income.

True
False
Only sometimes true
Not applicable

The correct answer is: True

Inventory is indeed considered an asset until it is sold, at which point it is recognized as a cost of goods sold (COGS) and contributes to net income. In financial accounting, inventory is classified as a current asset on the balance sheet because it is expected to be converted into cash through sales within a year. While it remains as inventory on the balance sheet, it does not influence net income. However, once the inventory is sold, its cost is deducted from revenues, thus playing a significant role in calculating the net income for a financial period. This relationship between inventory and income is foundational in understanding inventory management and financial reporting in supply chain contexts.