Accounting for Inventories (IAS 2)

FA – May 2012 – L1 – SB – Q3 – Accounting for Inventories in Accordance with IAS 2

Accounting treatment for containers used in sales and calculation of deposits owed by customers.

Question

Nimyaro Limited sold goods in containers, which are charged out to customers at N15 each. Customers were credited with N10 for each container returned before the expiration of the due dates. At the end of the year, inventories of containers in warehouse and all returnable containers in the hands of customers were valued at N5 each.
On 1 August 2011, the number of such containers were 10,000 and 35,000 respectively. During the year ended 31 July 2011, the following transactions relating to containers took place:
(i) 40,000 were purchased at N7.50 each.
(ii) 150,000 were charged to customers.
(iii) 125,000 were returned by customers.
(iv) 4,000 of the returned containers were useless and sold for N5,000.
(v) On 31 July 2011, 55,000 containers invoiced since 1 July 2011 were in the hands of customers.
You are required to record the above transactions in the books of Nimyaro Limited for
the year ended 31 July 2011 using Containers Suspense Account Method.

Answer

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Tags: Containers, Debtor Control, Sales Accounting
Level: Level 1

Topic: Accounting for Inventories (IAS 2)
Series: MAY 2012

FA – May 2012 – L1 – SA – Q28 – Accounting for Inventories (IAS 2)

Identifying the accounting concept that guides the treatment of known losses and inventory valuation.

Question

Borox Limited makes provision for all known losses and values its inventories at the lower of cost and net realizable value. Which accounting concept is the company complying with?

Answer

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Tags: IAS 2, Inventory, Prudence, Valuation
Level: Level 1

Topic: Accounting for Inventories (IAS 2)
Series: MAY 2012

FA – May 2012 – L1 – SA – Q24 – Accounting for Inventories in Accordance with IAS 2

Identifying the most appropriate basis for apportioning inventory holding costs among departments.

Question

The most appropriate basis for apportioning inventory holding costs among departments is to use the value of:

Answer

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Tags: Cost Allocation, Inventory
Level: Level 1

Topic: Accounting for Inventories (IAS 2)
Series: MAY 2012

FA – May 2012 – L1 – SA – Q19 – Accounting for Inventories in Accordance with IAS 2

Identifying a non-advantage of computerized accounting systems.

Question

Which of the following is NOT an advantage of computer accounting application packages over manual accounting?

A. Generating a variety of accounting reports
B. Improving the quality of financial reporting
C. Allowing the use of common data to update relevant accounting modules
D. Processing larger quantities of data quickly and accurately
E. Allowing non-experts unrestricted use of the application packages

Answer

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Tags: Computerized Accounting, Financial Reporting
Level: Level 1

Topic: Accounting for Inventories (IAS 2)
Series: MAY 2012

FA – May 2012 – L1 – SA – Q13 – Accounting for Inventories (IAS 2)

Identifying the best method for inventory valuation according to IAS 2.

Question

According to International Accounting Standard No 2 on “Inventories”, which of the following methods can best be employed for the calculation and valuation of inventories?

A. Last purchase price
B. Last-In-First-Out
C. Base stock
D. Average cost
E. Replacement cost

Answer

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Tags: Financial Statements, IAS 2, Inventory Valuation
Level: Level 1

Topic: Accounting for Inventories (IAS 2)
Series: MAY 2012

FA – Nov 2011 – L1 – SA – Q6 – Accounting for Inventories (IAS 2)

This question asks about the basis for valuing stock in a trading company.

Question

What is the basis of valuing stock in a trading company?

Answer

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Tags: Inventory Valuation, Stock
Level: Level 1

Topic: Accounting for Inventories (IAS 2)
Series: NOV 2011

FA – Nov 2011 – L1 – SA – Q20 – Accounting for Inventories (IAS 2)

This question asks about the basis for valuing inventory.

Question

The basis of valuation of inventory is
A. Lower of cost or net realizable value
B. Lower of cost and market value
C. Lower of cost and net realizable value
D. Lower of average cost and market value
E. Lower of average cost and net realizable value

Answer

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Tags: Inventory Valuation, Lower of Cost or Market Value
Level: Level 1

Topic: Accounting for Inventories (IAS 2)
Series: NOV 2011

FA – Nov 2020 – L1 – SA – Q12 – Accounting for Inventories (IAS 2)

Identifies the costs to be included in inventory valuation under IAS 2 for a manufacturing company.

Question

In accordance with IAS 2 – Inventories, which of the following costs should be included in the valuation of inventories of a manufacturing company?
A. Carriage outwards
B. Carriage inwards
C. General administrative overheads
D. Depreciation of land and buildings
E. Discount allowed

Answer

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Tags: IAS 2, Inventory Valuation, Manufacturing Company
Level: Level 1

Topic: Accounting for Inventories (IAS 2)
Series: NOV 2020

FA – Nov 2020 – L1 – SA – Q5 – Accounting for Inventories in Accordance with IAS 2

Effect of closing inventory overvaluation on reported profit.

Question

The closing inventories of a firm were overvalued by N300,000 due to an overcast error in one of the inventory valuation sheets.

How would the correction of this affect the reported profit?
A. Increase reported profit by N300,000
B. Reduce reported profit by N300,000
C. No effect on the reported profit
D. Increase reported profit by N600,000
E. Reduce reported profit by N600,000

Answer

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Tags: Error Correction, Inventory Valuation, Profit Impact
Level: Level 1

Topic: Accounting for Inventories (IAS 2)
Series: NOV 2020

FA – May 2013 – L1 – SA – Q23 – Accounting for Inventories (IAS 2)

This question tests the effect of overstating closing inventory on net income.

Question

What is the effect of overstating closing inventory on net income?

Answer

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Tags: Closing Inventory, Financial Statements
Level: Level 1

Topic: Accounting for Inventories (IAS 2)
Series: MAY 2013

FA – May 2012 – L1 – SB – Q3 – Accounting for Inventories in Accordance with IAS 2

Accounting treatment for containers used in sales and calculation of deposits owed by customers.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Containers, Debtor Control, Sales Accounting
Level: Level 1

Topic: Accounting for Inventories (IAS 2)
Series: MAY 2012

FA – May 2012 – L1 – SA – Q28 – Accounting for Inventories (IAS 2)

Identifying the accounting concept that guides the treatment of known losses and inventory valuation.

Question

Borox Limited makes provision for all known losses and values its inventories at the lower of cost and net realizable value. Which accounting concept is the company complying with?

Answer

Find Related Questions by Tags, levels, etc.

Tags: IAS 2, Inventory, Prudence, Valuation
Level: Level 1

Topic: Accounting for Inventories (IAS 2)
Series: MAY 2012

FA – May 2012 – L1 – SA – Q24 – Accounting for Inventories in Accordance with IAS 2

Identifying the most appropriate basis for apportioning inventory holding costs among departments.

Question

The most appropriate basis for apportioning inventory holding costs among departments is to use the value of:

Answer

Find Related Questions by Tags, levels, etc.

Tags: Cost Allocation, Inventory
Level: Level 1

Topic: Accounting for Inventories (IAS 2)
Series: MAY 2012

FA – May 2012 – L1 – SA – Q19 – Accounting for Inventories in Accordance with IAS 2

Identifying a non-advantage of computerized accounting systems.

Question

Which of the following is NOT an advantage of computer accounting application packages over manual accounting?

Answer

Find Related Questions by Tags, levels, etc.

Tags: Computerized Accounting, Financial Reporting
Level: Level 1

Topic: Accounting for Inventories (IAS 2)
Series: MAY 2012

FA – May 2012 – L1 – SA – Q13 – Accounting for Inventories (IAS 2)

Identifying the best method for inventory valuation according to IAS 2.

Question

According to International Accounting Standard No 2 on “Inventories”, which of the following methods can best be employed for the calculation and valuation of inventories?

A. Last purchase price
B. Last-In-First-Out
C. Base stock
D. Average cost
E. Replacement cost

Answer

Find Related Questions by Tags, levels, etc.

Tags: Financial Statements, IAS 2, Inventory Valuation
Level: Level 1

Topic: Accounting for Inventories (IAS 2)
Series: MAY 2012

FA – Nov 2011 – L1 – SA – Q6 – Accounting for Inventories (IAS 2)

This question asks about the basis for valuing stock in a trading company.

Question

What is the basis of valuing stock in a trading company?

Answer

Find Related Questions by Tags, levels, etc.

Tags: Inventory Valuation, Stock
Level: Level 1

Topic: Accounting for Inventories (IAS 2)
Series: NOV 2011

FA – Nov 2011 – L1 – SA – Q20 – Accounting for Inventories (IAS 2)

This question asks about the basis for valuing inventory.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Inventory Valuation, Lower of Cost or Market Value
Level: Level 1

Topic: Accounting for Inventories (IAS 2)
Series: NOV 2011

FA – Nov 2020 – L1 – SA – Q12 – Accounting for Inventories (IAS 2)

Identifies the costs to be included in inventory valuation under IAS 2 for a manufacturing company.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: IAS 2, Inventory Valuation, Manufacturing Company
Level: Level 1

Topic: Accounting for Inventories (IAS 2)
Series: NOV 2020

FA – Nov 2020 – L1 – SA – Q5 – Accounting for Inventories in Accordance with IAS 2

Effect of closing inventory overvaluation on reported profit.

Question

The closing inventories of a firm were overvalued by N300,000 due to an overcast error in one of the inventory valuation sheets.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Error Correction, Inventory Valuation, Profit Impact
Level: Level 1

Topic: Accounting for Inventories (IAS 2)
Series: NOV 2020

FA – May 2013 – L1 – SA – Q23 – Accounting for Inventories (IAS 2)

This question tests the effect of overstating closing inventory on net income.

Question

What is the effect of overstating closing inventory on net income?

Answer

Find Related Questions by Tags, levels, etc.

Tags: Closing Inventory, Financial Statements
Level: Level 1

Topic: Accounting for Inventories (IAS 2)
Series: MAY 2013

Topic: Accounting for Inventories (IAS 2)

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FA – May 2012 – L1 – SB – Q3 – Accounting for Inventories in Accordance with IAS 2

Accounting treatment for containers used in sales and calculation of deposits owed by customers.

You're reporting an error for "FA – May 2012 – L1 – SB – Q3 – Accounting for Inventories in Accordance with IAS 2"

FA – May 2012 – L1 – SA – Q28 – Accounting for Inventories (IAS 2)

Identifying the accounting concept that guides the treatment of known losses and inventory valuation.

You're reporting an error for "FA – May 2012 – L1 – SA – Q28 – Accounting for Inventories (IAS 2)"

FA – May 2012 – L1 – SA – Q24 – Accounting for Inventories in Accordance with IAS 2

Identifying the most appropriate basis for apportioning inventory holding costs among departments.

You're reporting an error for "FA – May 2012 – L1 – SA – Q24 – Accounting for Inventories in Accordance with IAS 2"

FA – May 2012 – L1 – SA – Q19 – Accounting for Inventories in Accordance with IAS 2

Identifying a non-advantage of computerized accounting systems.

You're reporting an error for "FA – May 2012 – L1 – SA – Q19 – Accounting for Inventories in Accordance with IAS 2"

FA – May 2012 – L1 – SA – Q13 – Accounting for Inventories (IAS 2)

Identifying the best method for inventory valuation according to IAS 2.

You're reporting an error for "FA – May 2012 – L1 – SA – Q13 – Accounting for Inventories (IAS 2)"

FA – Nov 2011 – L1 – SA – Q6 – Accounting for Inventories (IAS 2)

This question asks about the basis for valuing stock in a trading company.

You're reporting an error for "FA – Nov 2011 – L1 – SA – Q6 – Accounting for Inventories (IAS 2)"

FA – Nov 2011 – L1 – SA – Q20 – Accounting for Inventories (IAS 2)

This question asks about the basis for valuing inventory.

You're reporting an error for "FA – Nov 2011 – L1 – SA – Q20 – Accounting for Inventories (IAS 2)"

FA – Nov 2020 – L1 – SA – Q12 – Accounting for Inventories (IAS 2)

Identifies the costs to be included in inventory valuation under IAS 2 for a manufacturing company.

You're reporting an error for "FA – Nov 2020 – L1 – SA – Q12 – Accounting for Inventories (IAS 2)"

FA – Nov 2020 – L1 – SA – Q5 – Accounting for Inventories in Accordance with IAS 2

Effect of closing inventory overvaluation on reported profit.

You're reporting an error for "FA – Nov 2020 – L1 – SA – Q5 – Accounting for Inventories in Accordance with IAS 2"

FA – May 2013 – L1 – SA – Q23 – Accounting for Inventories (IAS 2)

This question tests the effect of overstating closing inventory on net income.

You're reporting an error for "FA – May 2013 – L1 – SA – Q23 – Accounting for Inventories (IAS 2)"

FA – May 2012 – L1 – SB – Q3 – Accounting for Inventories in Accordance with IAS 2

Accounting treatment for containers used in sales and calculation of deposits owed by customers.

You're reporting an error for "FA – May 2012 – L1 – SB – Q3 – Accounting for Inventories in Accordance with IAS 2"

FA – May 2012 – L1 – SA – Q28 – Accounting for Inventories (IAS 2)

Identifying the accounting concept that guides the treatment of known losses and inventory valuation.

You're reporting an error for "FA – May 2012 – L1 – SA – Q28 – Accounting for Inventories (IAS 2)"

FA – May 2012 – L1 – SA – Q24 – Accounting for Inventories in Accordance with IAS 2

Identifying the most appropriate basis for apportioning inventory holding costs among departments.

You're reporting an error for "FA – May 2012 – L1 – SA – Q24 – Accounting for Inventories in Accordance with IAS 2"

FA – May 2012 – L1 – SA – Q19 – Accounting for Inventories in Accordance with IAS 2

Identifying a non-advantage of computerized accounting systems.

You're reporting an error for "FA – May 2012 – L1 – SA – Q19 – Accounting for Inventories in Accordance with IAS 2"

FA – May 2012 – L1 – SA – Q13 – Accounting for Inventories (IAS 2)

Identifying the best method for inventory valuation according to IAS 2.

You're reporting an error for "FA – May 2012 – L1 – SA – Q13 – Accounting for Inventories (IAS 2)"

FA – Nov 2011 – L1 – SA – Q6 – Accounting for Inventories (IAS 2)

This question asks about the basis for valuing stock in a trading company.

You're reporting an error for "FA – Nov 2011 – L1 – SA – Q6 – Accounting for Inventories (IAS 2)"

FA – Nov 2011 – L1 – SA – Q20 – Accounting for Inventories (IAS 2)

This question asks about the basis for valuing inventory.

You're reporting an error for "FA – Nov 2011 – L1 – SA – Q20 – Accounting for Inventories (IAS 2)"

FA – Nov 2020 – L1 – SA – Q12 – Accounting for Inventories (IAS 2)

Identifies the costs to be included in inventory valuation under IAS 2 for a manufacturing company.

You're reporting an error for "FA – Nov 2020 – L1 – SA – Q12 – Accounting for Inventories (IAS 2)"

FA – Nov 2020 – L1 – SA – Q5 – Accounting for Inventories in Accordance with IAS 2

Effect of closing inventory overvaluation on reported profit.

You're reporting an error for "FA – Nov 2020 – L1 – SA – Q5 – Accounting for Inventories in Accordance with IAS 2"

FA – May 2013 – L1 – SA – Q23 – Accounting for Inventories (IAS 2)

This question tests the effect of overstating closing inventory on net income.

You're reporting an error for "FA – May 2013 – L1 – SA – Q23 – Accounting for Inventories (IAS 2)"

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