18 Questions
Which of the following is considered an inventory asset?
Raw materials
What is net realizable value?
The estimated selling price of an asset
When do grapes become inventory for the wine company?
During the one-year process cycle
According to IAS 2, which method is recommended for evaluating inventory of interchangeable goods?
FIFO
In the FIFO method, which quantities are the first to be sold or used in production?
Oldest purchased or produced quantities
When is the LIFO (Last In First Out) method applicable for evaluating inventory?
Under IFRS
When should a new category be created for inventory evaluation?
When there is a new price
Which method of inventory evaluation is NOT allowed by IAS 2?
LIFO
What is the main purpose of the journal entry at the end of the year?
To represent the difference between the beginning and end inventories in profit and loss
What is the difference between IAS 2 and OIC 13 in terms of allowed evaluation methods?
IAS 2 allows specific costs and weighted average cost, while OIC 13 allows FIFO and LIFO
According to IAS 2, which of the following is NOT considered as an inventory?
Raw materials
According to IAS 2, when should inventories be recognized?
When risks and rewards of ownership have transferred
According to IAS 2, how should inventories be evaluated?
At the lowest between cost and net realizable value
According to IAS 2, what does net realizable value represent?
The expected selling price for partially finished and finished products
Which method is used to value inventory in this example?
Weighted average cost
When is an impairment recorded for inventories?
When inventories become damaged or obsolete
How is the net realizable value (NRV) of inventories calculated in this example?
By considering the selling prices of inventories
What is the reason for recording an impairment of Euro 120 in this example?
The net realizable value (NRV) of inventories has decreased
Test your knowledge on evaluating inventory costs with this quiz! Learn about the different approaches to cost determination, including categorizing inventory by model or evaluating customized items separately. Challenge yourself and improve your understanding of inventory valuation methods.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
