Quiz 1

A factory that produces electronic devices keeps products that are completely ready for sale. How would these items be classified?

• Raw materials

• Work-in-progress

• Finished goods

• Maintenance supplies

Which of the following is discouraged by International Accounting Standards (IAS) 2?

• First in first out

• Last in first out

• Average cost

• Weighted average

Under FIFO, which inventory items are assumed to be sold first?

• The oldest items in stock

• The most expensive items

• The newest items received

• The least valuable items

In which of the following situations would LIFO be a reasonable choice?

• When dealing with perishable goods

• When inventory items are stored in a tank and mixed

• When selling items or material stored in piles

• When using specific identification for high-value items

A business has the following inventory purchases: - 100 units at RM5 each - 200 units at RM6 each - 150 units at RM8 each If 150 units are sold under FIFO, what is the value of the remaining inventory?

• RM480

• RM840

• RM2,100

• RM1,200

What is the most common basis for valuing inventory in financial statements?

• Fair market value

• Historical cost

• Net realizable value (NRV)

• Replacement cost

What does the opening trade receivables in a Debtor Control Account represent?

• Cash payments made to suppliers

• Total discounts allowed during the period

• Credit purchases during the period

• List of debtor balances from the previous period

What does the "returns outwards" in the Creditor Control Account indicate?

• Goods returned to suppliers

• Discount allowed to debtors

• Sales returns to customers

• Payments made to creditors

What basic principle is the control account based on?

• Balances are always zero.

• Only closing balances matter.

• Opening balance, additions, and deductions determine the closing balance.

• It records revenue and expenses.

How do control accounts help in audits?

• They eliminate the need for audits

• They provide a quick reference to verify the accuracy of detailed ledgers

• They replace the role of auditors

• They allow auditors to focus on summarized financial information only