Raw materials held by a manufacturer are categorized as?

Raw materials held by a manufacturer are categorized as inventory because they represent goods that are in the process of being transformed into finished products. Inventory encompasses various types of goods and materials that a business uses to produce its products, and it typically includes raw materials, work-in-progress, and finished goods.

By being classified as inventory, raw materials can be tracked for accounting purposes, allowing the business to assess how much material is available for production as well as monitor costs associated with these materials. This classification is vital for financial reporting and inventory management, helping manufacturers manage their resources effectively and make informed production and purchasing decisions.

The other options do not apply to raw materials: intangible assets refer to non-physical assets like patents or branding, fixed assets are long-term physical assets like machinery and buildings, and real assets generally pertain to land and buildings. Hence, the appropriate classification for raw materials is inventory.