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Which of the following statements about the valuation of inventory are correct, according to IAS 2 Inventories?

1 Inventory items are normally to be valued at the higher of cost and net realisable value.

2 The cost of goods manufactured by an entity will include materials and labour only. Overhead costs cannot be included.

3 LIFO (last in, first out) cannot be used to value inventory.

4 Selling price less estimated profit margin may be used to arrive at cost if this gives a reasonable approximation to actual

cost.

A

1, 3 and 4 only

B

1 and 2 only

C

3 and 4 only

D

None of the statements are correct

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Chapter7Inventory

Statement 1) inventory should be valued at the lower of cost and NRV not the higherStatement 2) production overheads

based on a normal level of production should be included

多做几道

Which accounting concept should be considered if the owner of a business takes goods from inventory for his own personal

use?

A

The fair presentation concept

B

The accruals concept

C

The going concern concept

D

The business entity concept

Which accounting concept should be considered if the owner of a business takes goods from inventory for his own personal

use?

A

The fair presentation concept

B

The accruals concept

C

The going concern concept

D

The business entity concept

According to the IASB's Conceptual Framework for Financial Reporting, which TWO of the following are part of faithful

representation?1 It is neutral2 It is relevant3 It is presented fairly4 It is free from material error

A

1 and 2

B

2 and 3

C

1 and 4

D

3 and4

Which of the following accounting concepts means that similar items should receive a similar accounting treatment?

A

Going concern

B

Accruals

C

Matching

D

Consistency

Listed below are some characteristics of financial information.1 Relevance2 Consistency3 Faithful representation4 Accuracy

Which of these are qualitative characteristics of financial information according to the IASB's Conceptual Framework for

Financial Reporting?

A

1 and 2 only

B

2 and 4 only

C

3 and 4 only

D

1 and 3 only

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