Exam 4: Inventories

Net realisable value of inventories may fall below cost for a number of reasons including: I. $\quad$ Product obsolescence II. $\quad$ Piysical deterioration of irventories III. $\quad$ Arl increase in the expected replacernent costs of the irventories IV. $\quad$ Arl increase in the estirnated costs of completion V. $\quad$ An error in quartities purchased causing overstocking

When determining the net realisable value of inventories, estimates must be made of which of the following: I. $\quad$ Estimated selling costs II. $\quad$ Expected selling price III. $\quad$ Expected replacernent cost IV. $\quad$ Estimated costs of completion (if ary)

Under the periodic inventories approach, an appropriate journal entry to measure closing inventories would be: a. DR Opening irventories (cost of goods sold expense) $\quad$ CR Irventories (asset) b. DR Purchases (expense) $\quad$ CR Irventories (asset) c. DR Irventories (asset) $\quad$ CR Closing irventories (cost of goods sold expense) d. DR Purchases returns (cost of goods sold expense) $\quad$ CR Irventories (asset)

AASB 102 Inventories applies to the accounting for:

Missy Limited sells household cleaners and had the following items of inventories at reporting date. Ittem Quantity Cost/unit NRV/unit Window 50 \ 25 \ 20 cleaners Vacuum 20 \ 150 \ 160 cleaners What is the adjustment necessary at reporting date?

AASB 102 Inventories requires items of inventories that are used by a business as components in a self-constructed property asset to be:

White Cotton Ltd uses a periodic inventories system and rounds the average unit cost to the nearest dollar. The following data relates to White Cotton Ltd for the year ended 30 June 2021. Opening inventories 1000 units@average cost of \ 20 each January purchases 2500 units@ \2 2 each February sales 1200 units March sales returns 50 units June sales 500 units July purchases 3000 units @ \2 5 each August sales 2400 units October purchases 5000 units @ \2 4 each November cales 4000 units The cost of goods sold for the year using the weighted average method is:

'Net realisable value' of inventories is defined in AASB 102 as the estimated selling price in the ordinary course of business:

Which of the following is specifically excluded by AASB 102 from the cost of inventories measurement?

When an entity's operating cycle is not clearly identifiable it is assumed to have a duration of: