Quiz on inventories

All of the criteria set in PAS 2 shall be met in order for an asset to be classified as inventory.

• TRUE

• FALSE

• SOMEWHAT TRUE

• SOMEWHAT FALSE

All storage costs may be capitalized as part of inventory cost.

• TRUE

• SOMEWHAT TRUE

• FALSE

• SOMEWHAT FALSE

List price is P1.2M with 25% trade disc, terms 2/15, n/60. How much is the payment if made within the disc period?

• Php 1,200,000

• Php 900,000

• Php 1,176,000

• Php 882,000

Compute for the total manufacturing cost.

• Php 3,480,000

• Php 2,200,000

• Php 1,900,000

• Php 2,280,000

Goods sold through FOB shipping point shall be excluded from the SELLER'S inventory.

• TRUE

• FALSE

The inclusion or exclusion of inventory in transit shall depend on the party who actually paid for the freight.

• FALSE

• TRUE

Inventory per physical count is P1,500,000. Compute for the adjusted inventory cost.

• Php 1,800,000

• Php 1,700,000

• Php 1,500,000

• Php 1,400,000

Goods sold through installment sales shall be generally excluded from the seller's inventory.

• TRUE

• FALSE

As to inventories in transit, which of the following shall still be included in seller's inventory?

• Goods sold FOB destination

• Goods sold FOB shipping point

• Both Blue and Cyan

• Neither Blue or Cyan

When incurring conversion costs in manufacturing inventories, which of the ff shall not be capitalized?

• Depreciation of factory building

• Salaries of factory admin employees

• Salaries of production line workers

• Depreciation of delivery truck