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Multiple Choice Identify the choice that best completes the
statement or answers the question.
1. According to IAS 2, inventories are assets:a. Held for sale
in the ordinary course of business.
b. In the process of production for sale in the ordinary course
of business.c. In the form of materials or supplies to be consumed
in the production process or
in the rendering of services.d. All of the above
ANSWER: DEasy
POINTS: 0 / 1REF: page 298
2. Which of the following items can only constitute a
work-in-progress inventory?a. Finished goods
b. Merchandisec. Servicesd. Raw materials
ANSWER: CEasy
POINTS: 0 / 1REF: page 298
3. In practice, what are the two methods for recording inventory
movements?a. Perpetual and periodic inventory systems.
b. Daily and annual inventory systems.c. Commercial and
manufacturing inventory systems.d. Continuous and discontinuous
inventory systems.
ANSWER: AEasyPOINTS: 0 / 1REF: page 302
4. Under a perpetual inventory system, a continuous recording of
changes in inventory ismaintained in the inventory account. How are
purchases recorded?a. As decreases of the inventory assets in the
balance sheet.
b. As increases of the inventory assets in the balance sheet.c.
As decreases of the provision for depreciation of inventories in
the balance
sheet.d. As increases of the provision for depreciation of
inventories in the balance sheet.
ANSWER: BEasy
POINTS: 0 / 1
Name: Score: 0 / 10 points (0%)
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REF: page 302
5. In an income statement organized by nature, how is the change
in inventory on therevenue side computed?a. Beginning inventory –
Ending inventory
b. Ending inventory – Beginning inventoryc. Beginning inventory
+ Ending inventoryd. (Beginning inventory + Ending inventory)/2
ANSWER: BModerate
POINTS: 0 / 1REF: page 306
6. Which procedure is applied when goods withdrawn are valued
batch by batch in thereverse order from the one they followed when
entering inventory?a. First-In, First-Out
b. Weighted average cost methodc. First-Out, First-Ind. Last-In,
First-Out
ANSWER: DModerate
POINTS: 0 / 1REF: page 308
7. In order to use LIFO, FIFO or weighted average costs method,
the products must be:a. Fungible to some degree
b. Small
c. Valuabled. Available for sale
ANSWER: AModerate
POINTS: 0 / 1REF: page 307
8. Given the following data, what is the amount of the ending
inventory under weightedaverage cost method (WAC)?
o No beginning inventoryo 1st purchase: 10 units are purchased
and are recorded for anacquisition cost of 10 CU per unito 2nd
purchase: 10 units are purchased and are recorded for anacquisition
cost of 12 CU per unito 15 units are sold at the end of the period
for a unit selling price of 18CU per unit
a. 60 b. 50c. 55d. 65
ANSWER: CModerate
POINTS: 0 / 1REF: pages 309, 310
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9. The choice of inventory valuation methods has an impact on
cash flow before tax.
a. True b. False
ANSWER: BModerate
POINTS: 0 / 1
REF: page 311 10. Given the following data, what is the amount
of the provision for loss of value of
inventory that must be recorded at the end of the accounting
period?o Purchase of 1 000 items X at a unit cost of acquisition of
20 CUo Wholesale market unit price of the items X dropped to 15 CUo
100 units of items X in inventory at the end of the accounting
period
a. 0 b. 100c. 500d. 1 000
ANSWER: CModerate
POINTS: 0 / 1REF: page 312
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