WorksheetsFA - Inventory & Assets
Total questions: 17
Worksheet time: 31mins
It is a financial statement that reports the assets, liabilities, and equity of a company on a given date.
Statement of Income
Statement of Financial Position
Statement of Cash Flow
Statement of Changes in Equity
What are the three elements of financial position?
Assets
Expenses
Liabilities
Owner's Equity
Which of the following costs may be included when arriving at the cost of finished goods inventory for inclusion in the financial statements of a manufacturing company?
1 Carriage inwards
2 Carriage outwards
3 Depreciation of factory plant
4 Finished goods storage costs
5 Factory supervisors’ wages
1 and 5 only
2, 4 and 5 only
1, 3 and 5 only
1, 2, 3 and 4 only
The closing inventory at cost of a company at 31 January 20X3 amounted to $284,700.
The following items were included at cost in the total:
1. 400 coats, which had cost $80 each and normally sold for $150 each. Owing to a defect in manufacture, they were all sold after the reporting date at 50% of their normal price. Selling expenses amounted to 5% of the proceeds.
2. 800 skirts, which had cost $20 each. These too were found to be defective. Remedial work in February 20X3 cost $5 per skirt, and selling expenses for the batch totalled $800. They were sold for $28 each.
What should the inventory value be according to IAS 2 Inventories after considering the above items?
$281,200
$282,800
$329,200
None of these
A company values its inventory using the first in, first out (FIFO) method. At 1 May 20X2 the company had 700 engines in inventory, valued at $190 each.
During the year ended 30 April 20X3 the following transactions took place:
20X2
1 July Purchased 500 engines at $220 each
1 November Sold 400 engines for $160,000
20X3
1 February Purchased 300 engines at $230 each
15 April Sold 250 engines for $125,000
What is the value of the company’s closing inventory of engines at 30 April 20X3?
$188,500
$195,500
$166,000
None of these figures
In preparing its financial statements for the current year, a company’s closing inventory was understated by $300,000.
What will be the effect of this error if it remains uncorrected?
The current year's profit will be overstated and next year's profit will be understated.
The current year's profit will be understated but there will be no effect on next year's profit.
The current year's profit will be understated and next year's profit will be overstated.
The current year's profit will be overstated but there will be no effect on next year's profit
Which of the following statements about IAS 2 Inventories is correct?
Production overheads should be included in cost on the basis of a company's normal level of activity in the period.
In arriving at the net realisable value of inventories, trade discounts and settlement discounts must be deducted.
In arriving at the cost of inventories, FIFO, LIFO and weighted average cost formulas are acceptable.
It is permitted to value finished goods inventories at materials plus labour cost only, without adding production overheads.
You are preparing the financial statements for a business. The cost of the items in closing inventory is $41,875. This includes some items which cost $1,960 and which were damaged in transit. You have estimated that it will cost $360 to repair the items, and they can then be sold for $1,200.
What is the correct inventory valuation for inclusion in the financial statements?
$39,915
$40,755
$41,515
$42,995
An inventory record card shows the following details.
February 1- 50 units in stock at a cost of $40 per unit
7 - 100 units purchased at a cost of $45 per unit
14 - 80 units sold
21 - 50 units purchased at a cost of $50 per unit
28 - 60 units sold
What is the value of inventory at 28 February using the FIFO method?
$2,450
$2,700
$2,950
$3,000
IAS 2 Inventories defines the items that may be included in computing the value of an inventory of finished goods manufactured by a business.
Which one of the following lists consists only of items which may be included in the statement of financial position value of such inventories, according to IAS 2?
Supervisor's wages, carriage inwards, carriage outwards, raw materials
Raw materials, carriage inwards, costs of storage of finished goods, plant depreciation
Plant depreciation, carriage inwards, raw materials, Supervisor's wages
Carriage outwards, raw materials, Supervisor's wages, plant depreciation
The closing inventory of X amounted to $116,400 excluding the following two inventory lines:
1. 400 items which had cost $4 each. All were sold after the reporting period for $3 each, with selling expenses of $200 for the batch.
2. 200 different items which had cost $30 each. These items were found to be defective at the end of the reporting period. Rectification work after the statement of financial position amounted to $1,200, after which they were sold for $35 each, with selling expenses totalling $300.
Which of the following total figures should appear in the statement of financial position of X for inventory?
$122,300
$121,900
$122,900
$123,300
Land is not depreciated as its useful life is _____________.
unlimited
limited
nil
none of theses
Reduction in the book value of an asset over a period of time is called___________.
Delpetion
Depreciation
Depreciation is a process of _________________.
Allocation of cost
Allocation of selling price
Allocation of goods price
Allocation of depreciation
