What are inventories?

Inventories refer to goods produced but not sold yet, making the selection the most accurate definition. In business, inventories encompass all items that are held for sale in the ordinary course of business, which includes finished goods that are ready to be sold but have not yet been purchased by customers. This definition is vital because it impacts how companies manage their stock levels and assess their efficiency in sales and production.

The other options describe different aspects of business and inventory management. The first choice pertains to sold products, which would not be classified as inventory since they are no longer held for sale. The third option discusses raw materials, which are the inputs used to create finished products but are not themselves considered inventory in the retail sense. Finally, the fourth option refers to financial assets, which are distinct from inventory as they represent investments or other forms of value rather than physical goods available for sale.