Accounting for inventory

What's best to describe an inventory

• Non current asset a business owned

• An asset that is being held in business

• Assets owned by business with purpose of selling to the customer

• a service or product of a business

the following is the importance of managing inventories EXCEPT

• determine inventories on hand

• determine price of inventory

• determine inventories available for sale

• determine cost of good sold

Which is the following the types of inventory system

• FIFO, LIFO, AVCO

• Cost Vs NRV

• periodic and perpetual

Which of the following is the similarities between perpetual and periodic

• updated after every purchase or sales

• detailed record

• computerised records

• None of the answers

how is the periodic inventory system is recorded

• Manually

• Computerised

• After every purchase and sales

which inventory system keeps track both quantities and cost

• perpetual

• periodic

i. cogs determined at the end of accounting period

ii. suits business selling high-volumes product at different outlets

iii. e.g ; carrefour, giant

These are the characteristics of the

• perpetual inventory system

• definition of NRV

• periodic inventory system

• definition of inventory

this inventory system suits small business

• periodic

• perpetual

the expenditure incurred in the normal course of business

What does this describes?

• net realisable value of inventory

• the stock count

• cost of inventory

• selling price of inventory

what concept is applied when doing inventory valuation

• matching concept

• historical cost concept

• conservatism/prudence concept

• separate entity concept