Those assets that a company: 1. Intends to sell in the normal course of business. 2. Has in production (work in process) for future sale. 3. Uses currently in the production of goods to be sold (raw materials). 8-3 Types of Inventories Types of Inventory Merchandise Inventory Goods acquired for resale Manufacturing Inventory •Raw Materials •Work-in-Process •Finished Goods 1 .8-4 Inventory Cost Flows Raw Materials Work in Process Finished Goods