After reviewing the financial statements of Bearden Company, Todd Howard concluded that the company was a service

Question:

After reviewing the of Bearden Company, Todd Howard concluded that the company was a service company. Mr. Howard based his conclusion on the fact that Bearden’s displayed no inventory accounts.
Required
Explain how Bearden’s implementation of a 100 percent effective just-in-time inventory system could have led Mr. Howard to a false conclusion regarding the nature of Bearden’s business.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...