Which type of collateral includes items like cleaning supplies?

The correct answer is inventory. In secured transactions, inventory refers to goods that are held for sale or lease, as well as those that are used or consumed in a business. Cleaning supplies, in this context, are typically used in the operation of a business or sold as part of its inventory.

Understanding inventory is essential in secured transactions because it can be a critical asset that businesses use for their operations. The classification of items as inventory allows secured parties to perfect their security interests in those goods, securing their rights in the event of a borrower's default.

The other categories do not accurately represent cleaning supplies. Equipment generally refers to goods used in the operation of a business but not intended for sale, consumer goods pertain to goods primarily used for personal, family, or household purposes, and farm products are specific to agricultural goods. Therefore, identifying cleaning supplies as inventory is consistent with how collateral is classified in secured transactions.