Why do we say Inventory can become a liability? Provide 2 situations creating this risk
Please explain shortly
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Introduction to terms
Liability: In the context of an organization or company, a liability is any obligation to be done or, any financial obligation or debt to be paid-off.
Inventory: Inventory can be defined as the amount/quantity of goods or raw materials which are stocked to be used in the process of manufacturing, or the goods half-worked upon or, the finished goods ready to be sent to customers/clients.
Risk: Any uncertain event that can cause loss or harm to the business. However, some risks can be anticipated and controlled or mitigated to a certain extent and some are unavoidable.
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