Which of the following types of inventory must not exceed a 12-month period for tax assessment?

The correct choice focuses on manufactured finished goods because they represent the final product ready for sale. For tax assessment purposes, finished goods must be disclosed within a time frame that does not exceed 12 months. This is important because inventory must be accurately assessed for tax liabilities within a given fiscal year, and finished goods inventory is typically expected to have clear timing limitations due to turnover rates and market demand.

In contrast, raw goods can remain in inventory for longer periods as they are not immediately saleable and may undergo further processing. Work-in-progress (WIP) inventory, which includes items still in the production phase, can also take longer than 12 months depending on the production cycle and complexity of the goods being manufactured. Scrap goods generally do not have the same strict timeframes as they are often the byproducts of production and can vary widely in terms of value and turnover, often being sold based on need rather than inventory cycle constraints.

Consequently, manufactured finished goods are most closely aligned with the requirement of being assessed within a 12-month period for tax purposes, highlighting the significance of timely reporting in tax assessments for products ready for market.