Inventory quiz

Which of the following shall be included in the cost of inventories

• Selling costs

• Freight charge on goods sold

• Abnormal amount of wasted material, labour or other production costs

• Storage costs that are necessary to a further production process

Which of the following inventory costing methods reports closely the current cost of inventory on the statement of financial position?

• FIFO

• LIFO

• Specific identification

In a period of rising prices, the inventory cost formula that tends to result in the Highway profit is?

• FIFO

• LIFO

• Specific identification

• Weighted average method

What amount should Mari company report as inventories in its statement of financial position?

• RM72k

• RM76k

• RM158k

• RM162k

Using FIFO inventory method the amount allocated to cost of sales for June is ?

• RM3,500

• RM4,659

• RM4,200

• RM4,770

Using the weighted average cost method the amount allocated to the runding inventory on 30 June is

• RM185

• RM226

• RM261

• RM196

Which statement is correct with respect to inventories?

• the FIFO method assumes that the earliest goods acquired are the last to be sold

• it is generally good business management to sell the most recently acquired goods first

• Under FIFO the ending inventory is based on the latest units purchase

• FIFO seldom coincides with actual physical flow of inventory

Accordingly to IAS 2 inventories, which of the following costs should be included in valuing the inventories of a manufacturing company?

1) carriage inwards

2) carriage outwards

3) depreciation of factory plant

4) general administrative overheads

• All of above

• 1 and 3 only

• 2 and 3 only

• 1,2 and 4 only

Goods in transit should be included in the inventory of the buyer when the

• Public carrier accept the goods from the seller

• Terms of sale are FOB delivery point

• Terms of sale are FOB destination

• None of the above

All inventories shall be measured at the lower of cost and net realisable value

• True

• False