In the context of business, which type of assets does 'inventory' fall under?

Inventory is classified as current assets because it is expected to be sold or consumed within a company's operating cycle, typically within one year. Current assets are assets that are readily convertible to cash or used up in the short term, allowing businesses to manage their day-to-day operations effectively.

Inventory is a crucial component of a business's working capital, as it directly relates to the production and sale of goods. This classification helps businesses track what they have on hand to sell and aids in financial planning.

Long-term assets, on the other hand, are those expected to provide value or benefit to a business for more than one year, which does not apply to inventory. Fixed assets are tangible items like buildings and machinery used over a longer period, while intangible assets refer to non-physical items such as patents or brand recognition. Therefore, inventory's classification as a current asset accurately reflects its role in the liquidity and operational efficiency of a business.