Which of the following best describes inventory?

Inventory is best defined as goods that a business maintains for sale or lease in the ordinary course of its operations. This definition encompasses products that are actively marketed and sold to customers, whether they're retail items, wholesale goods, or items produced for lease. Inventory is crucial for businesses as it plays a key role in their cash flow management and operational efficiency.

The other options do not accurately describe inventory. Goods held solely for personal use do not qualify as inventory because they are not intended for sale or commercial purposes. Tangible assets held as collateral refer to properties offered to secure a debt, and while they may include inventory in certain contexts, not all collateral qualifies as inventory. Lastly, items purchased for investment purposes are acquired with the intention of generating a return, rather than for direct sale in the business operations, which separates them from the definition of inventory.