Finished goods inventory is reported on the

a. balance sheet as a long-term asset

b. income statement as revenue

c. balance sheet as a current asset

d. income statement as a period cost

(C) balance sheet as a current asset

Explanation:

Finished goods inventory are considered part of the assets of a company, and due to their short life span, are recognized as current assets. Thus, they are recognized on the balance sheet as current assets.

Option A is incorrect because finished goods inventory are short-term assets and are usually disposed off within a year. Option B is incorrect as only sold finished goods make up revenue, not those held as inventory. Option D is incorrect because finished goods inventory are not period cost. However, the cost of purchasing or manufacturing them are considered as cost.