Inventories PAS 2 (Set 1: Overview)

Inventories standard

Answer explanation

PAS 2

Inventories include

Answer explanation

finished goods

work in process

raw materials

purchased subcomponents

goods held by trade for resale

inventory is initially recognized as

(a)  

Inventories is initially measured

(a)  

Cost of inventories comprises of:

Answer explanation

1. Cost of purchase

2. Cost of conversion

3. Other cost incurred in bringing inventories to its present location and condition

Cost of purchase are

Answer explanation

1. Purchase price

2. Import duties and taxes, nonrecoverable

3. Transport, handling, and other costs directly attributable to acquisition

Cost of conversion are

Answer explanation

1. Direct labor

2. Direct materials

3. Fixed production overhead

4. Variable production overhead

5. Joint products

6. By products

Other costs incurred in bringing inventories to its present location and condition

Answer explanation

1. Borrowing cost under PAS 23

2. Storage cost, essential

3. Nonproduction overhead or cost incurred in designing specified orders