Inventory
In one sentenceGoods and materials a business owns for sale or for use in production; they appear as a current asset in the statement of financial position.
Simply put
Inventory is what is on your shelves and in your warehouses that you intend to sell: finished goods, raw materials, or work in progress. It is covered by international accounting standard IAS 2.
It is measured at the lower of cost and net realizable value. It is money tied up until sold, so you monitor its quantity and how fast it turns over.
Example
In a pharmacy, the medicines and cosmetics displayed for sale are inventory, while the medicine refrigerator and the cash registers are fixed assets because they are not sold.
Don't confuse it with
AssetA fixed asset is used by the business for years and not sold, while inventory is held for sale within the operating cycle.