- 15 Marks
FR – May 2024 – L2 – SA – Q6 – Inventory Accounting
Explains perpetual inventory system, differences in inventory counting, and disclosure requirements.
Question
a. IAS 2 – Inventories sets out the requirements to be followed when accounting for inventory and specifies two methods of recording inventory to allow the calculation of cost of sales.
Required:
i. Explain the term ‘Perpetual inventory system’ and identify FIVE possible causes of differences between the balance on the inventory account and the physical inventory counted. (5 Marks)
ii. State the disclosure requirements for inventory in notes to the financial statements. (5 Marks)
b. Many accountants believe that Block-Chain Technology will enhance the recording of financial transactions globally.
Required:
Explain the term “Block-Chain Technology” and state THREE disadvantages of adopting the technology. (5 Marks)
Find Related Questions by Tags, levels, etc.
- Tags: Cost measurement, Disclosure Requirements, IAS 2, Inventories, Perpetual Inventory System
- Level: Level 2
- Topic: Inventory Accounting (IAS 2)
- Series: MAY 2023
