PAS 2 Inventories

These are goods and materials on hand not yet placed into production

• Finished Goods

• Raw Materials

It is is a shipping term where the title passes to the buyer the moment the seller delivers the goods to the common carrier, who acts as an agent fot the buyer.

• FOB Shipping point

• FOB Destination

It is a freight term, which means the carrier will collect the cost of transportation the goods to the buyer.

• Freight collect

• Freight prepaid

What is the international counterpart of PAS 2?

• IAS 2

• IFRS 2

Which cost formula assumes that the items of inventory that were purchased or produced first are sold first?

• Weighted Average

• FIFO Method

It is a cost formula in which each item is determined from the weighted average of the cost of similar items at the beginning of a period and the cost of similar items purchased or produced during the period.

• Weighted Average

• FIFO Method

It is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

• Carrying Amount

• Net Realizable Value

Which is excluded from the cost of inventories?

• Import Duties

• Administration Overheads

It is a shipping term where the risk of loss is transferred from seller to the buyer at a named port alongside a vessel designated by the buyer.

• FAS

• CIF

It means that specific costs are attributed to identified items of inventory.

• Specific Identification

• FIFO