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    QUIZ - PAS 2 - INVENTORIES No Answer

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    Carl
    The document is a quiz on inventory costing and valuation according to PAS 2. It contains 10 multiple choice questions testing understanding of concepts such as: 1) costs included in inventory valuation; 2) treatment of trade discounts; 3) methods for valuing ending inventory under FIFO, weighted average, and moving average cost formulas. The key points are that storage, transport and some tax costs are included in inventory costs, while trade discounts are deducted from cost or NRV. Inventories are valued at the lower of cost or net realizable value.

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    QUIZ - PAS 2 - INVENTORIES No Answer

    Uploaded by

    Carl
    893 views2 pages
    The document is a quiz on inventory costing and valuation according to PAS 2. It contains 10 multiple choice questions testing understanding of concepts such as: 1) costs included in inventory valuation; 2) treatment of trade discounts; 3) methods for valuing ending inventory under FIFO, weighted average, and moving average cost formulas. The key points are that storage, transport and some tax costs are included in inventory costs, while trade discounts are deducted from cost or NRV. Inventories are valued at the lower of cost or net realizable value.

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    QUIZ_PAS-2_INVENTORIES-no-answer

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    The document is a quiz on inventory costing and valuation according to PAS 2. It contains 10 multiple choice questions testing understanding of concepts such as: 1) costs included in inventory valuation; 2) treatment of trade discounts; 3) methods for valuing ending inventory under FIFO, weighted average, and moving average cost formulas. The key points are that storage, transport and some tax costs are included in inventory costs, while trade discounts are deducted from cost or NRV. Inventories are valued at the lower of cost or net realizable value.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    893 views2 pages

    QUIZ - PAS 2 - INVENTORIES No Answer

    Uploaded by

    Carl
    The document is a quiz on inventory costing and valuation according to PAS 2. It contains 10 multiple choice questions testing understanding of concepts such as: 1) costs included in inventory valuation; 2) treatment of trade discounts; 3) methods for valuing ending inventory under FIFO, weighted average, and moving average cost formulas. The key points are that storage, transport and some tax costs are included in inventory costs, while trade discounts are deducted from cost or NRV. Inventories are valued at the lower of cost or net realizable value.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Page |1

    PAS 2 Inventories
    QUIZ:

    1. Which of the following is added to the cost of inventories?


    a. Storage costs of part-finished goods
    b. Trade discounts
    c. Refundable purchase taxes
    d. Administrative costs

    2. Which of the following costs are included in the cost of inventories?


    a. Transport costs for raw materials
    b. Abnormal material usage
    c. Storage costs relating to finished goods
    d. Administrative and general overhead

    3. How should trade discounts be dealt with when valuing inventories at the lower of cost and net
    realisable value (NRV) according to PAS 2?
    a. Added to cost
    b. Ignored
    c. Deducted in arriving at NRV
    d. Deducted from cost

    4. The cost of inventory should not include


    I. Purchase price.
    II. Import duties and other taxes.
    III. Abnormal amounts of wasted materials.
    IV. Administrative overhead.
    V. Fixed and variable production overhead.
    VI. Selling costs.

    a. II, III, IV, V


    b. III, IV, VI
    c. I, II
    d. II, III, IV, V, VI

    5. The Coronet Company has a cost card in relation to an item of goods manufactured as follows:
    Materials 70
    Storage costs of finished goods 18
    Delivery to customers (Freight out) 4
    Non-recoverable purchase taxes 6

    According to PAS 2, at what figure should the item be valued in inventory?


    a. 88
    b. 76
    c. 98
    d. 94
    Page |2

    6. Inventories are measured at


    a. Lower of cost and fair value.
    b. Lower of cost and net realizable value.
    c. Lower of cost and nominal value.
    d. Lower of cost and net selling price.
    e. Choices b and d.

    7. Which of the following costs of conversion cannot be included in cost of inventory?


    a. Cost of direct labor.
    b. Factory rent and utilities.
    c. Salaries of sales staff (sales department shares the building with factory supervisor).
    d. Factory overheads based on normal capacity.

    Use the following information for the next three questions:


    Entity A, a trading entity, buys and sells Product Z. Movements in the inventory of Product Z
    during the period are as follows:

    Date Transaction Units Unit cost Total cost


    Feb. 1 Beginning inventory 100 ₱15 ₱1,500
    7 Purchase 300 18 5,400
    12 Sale 320
    21 Purchase 200 21 4,200

    8. How much is the ending inventory under the FIFO cost formula?
    a. 6,540
    b. 5,840
    c. 5,640
    d. 4,860

    9. How much is the ending inventory under the Weighted Average cost formula? (The average is
    calculated on a periodic basis.)
    a. 5,180
    b. 5,280
    c. 5,460
    d. 5,580

    10. How much is the ending inventory under the Weighted Average cost formula? (The average is
    calculated as each additional purchase is made, i.e., ‘moving average’.)
    a. 5,860
    b. 5,680
    c. 5,580
    d. 5,380

    “Be strong and courageous. Do not fear of be in dread of them, for it is the Lord your God who goes with you. He
    will not leave you or forsake you.” (Deuteronomy 31:6)

    - END -

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