MFRS 102-INVENTORIES

What is the primary/main objective of MFRS 102 : Inventories?

• To measure non-current assets available in an entity

• To calculate the tax liabilities

• To determine the profitability of a business entity

• To prescribe the accounting treatments for inventories

Which of the following is NOT included in the definition of inventories under MFRS 102?

• Raw materials

• Finished goods

• Property held for investment

• Work in progress

Inventories are measured at:

_{A. Cost or net realizable value, whichever is lower}

_{B. Cost or fair value, whichever is lower}

_{C. Market value}

_{D. Net realizable value only}

• A

• B

• C

• D

When inventories are sold, the carrying amount is:

• Added to assets

• Expensed as cost of goods sold

• Transferred to liabilities

• Written off completely

Which of the following is NOT a cost of conversion?

• Allocation of variable production overheads

• Allocation of fixed production overheads

• Depreciation of administrative office equipment

• Direct labour

All the methods can be used under MFRS 102 for inventory valuation EXCEPT for

A. Standard Cost

B. LIFO

C. Weighted Average

D. FIFO

• A

• B

• C

• D

How are the fixed production overheads allocated to inventory?

• Based on the actual production only

• Based on estimated sales

• Not allocated at all

• Based on the normal capacity of the production facilities

What happens when the circumstances that caused inventories to be written down no longer exist?

• The write-down is reversed

• Inventories are revalued upward above cost

• A new write-down is made

• No change is made

Which of the following is NOT disclosed in the financial statements according to MFRS 102?

i.Carrying amounts classified by the type of the inventory

ii. Budgeted sales of the inventory

iii. Number of write-downs and reversals

iv. Accounting policies for the inventory measurement

• i and iv

• ii only

• ii and iv

• i and iii

MFRS 102: Inventories allows reversal of inventory write-downs when circumstances change.

(only answer in TRUE/FALSE)