Question 1

AASB 102 Inventories requires that when inventories are written down to net realisable value, they are written-down:

Accepted Answer

A)  on a class-by-class basis. 
B)  on the basis of industry segment. 
C)  on an item-by-item basis. 
D)  according to geographical segment within the entity. 
A)  on a class-by-class basis. 
B)  on the basis of industry segment. 
C)  on an item-by-item basis. 
D)  according to geographical segment within the entity.

Question 2

Under the periodic inventories approach, how is the cost of goods sold during a period determined?

Accepted Answer

A)  Beginning inventories + net purchases - ending inventories 
B)  Beginning inventories - net purchases - ending inventories 
C)  Opening inventories + net purchases + closing inventories 
D)  Opening inventories - net purchases + closing inventories 
A)  Beginning inventories + net purchases - ending inventories 
B)  Beginning inventories - net purchases - ending inventories 
C)  Opening inventories + net purchases + closing inventories 
D)  Opening inventories - net purchases + closing inventories

Question 3

When an entity's operating cycle is not clearly identifiable it is assumed to be:

Accepted Answer

A)  three months. 
B)  six months. 
C)  nine months. 
D)  12 months. 
A)  three months. 
B)  six months. 
C)  nine months. 
D)  12 months.

Question 4

The weighted average inventories costing method is particularly suitable to inventories where:

Accepted Answer

A)  dissimilar products are stored in separate locations. 
B)  the entity carries stocks of raw materials, work-in-progress and finished goods. 
C)  goods have distinct use-by dates and the goods produced first must be sold earliest. 
D)  homogeneous products are mixed together. 
A)  dissimilar products are stored in separate locations. 
B)  the entity carries stocks of raw materials, work-in-progress and finished goods. 
C)  goods have distinct use-by dates and the goods produced first must be sold earliest. 
D)  homogeneous products are mixed together.

Question 5

Which of the following is an appropriate journal entry to recognise inventories items that have been lost:

Accepted Answer

A)  I. 
B)  II. 
C)  III. 
D)  IV. 
A)  I. 
B)  II. 
C)  III. 
D)  IV.

Question 6

Net realisable value of inventories may fall below cost for a number of reasons including which of the following:

Accepted Answer

A)  I, II and IV only 
B)  I, III and IV only 
C)  II, III and IV only 
D)  I and II only 
A)  I, II and IV only 
B)  I, III and IV only 
C)  II, III and IV only 
D)  I and II only

Question 7

AASB 102 requires disclosure of which of the following:

Accepted Answer

A)  II and III only 
B)  I, II and III only 
C)  II, III and IV only 
D)  I, II, III and IV 
A)  II and III only 
B)  I, II and III only 
C)  II, III and IV only 
D)  I, II, III and IV

Question 8

If the selling price of inventories that has been written down to net realisable value in a prior period, subsequently recovers, the:

Accepted Answer

A)  previous amount of the write-down can be reversed. 
B)  carrying amount of the inventories cannot be adjusted. 
C)  value adjustment can be recognised immediately in equity. 
D)  adjustment must be recognised in a 'provision for future inventories write-downs' account. 
A)  previous amount of the write-down can be reversed. 
B)  carrying amount of the inventories cannot be adjusted. 
C)  value adjustment can be recognised immediately in equity. 
D)  adjustment must be recognised in a 'provision for future inventories write-downs' account.

Question 9

Commodity broker traders are able to measure their inventories at:

Accepted Answer

A)  replacement cost. 
B)  nominal cost. 
C)  fair value less costs of disposal. 
D)  current cost. 
A)  replacement cost. 
B)  nominal cost. 
C)  fair value less costs of disposal. 
D)  current cost.

Question 10

The measurement rule for inventories, mandated by AASB 102 Inventories, is:

Accepted Answer

A)  lower of fair value and selling price. 
B)  lower of cost and net realisable value. 
C)  higher of initial cost and realisable value. 
D)  higher of completion costs and replacement costs. 
A)  lower of fair value and selling price. 
B)  lower of cost and net realisable value. 
C)  higher of initial cost and realisable value. 
D)  higher of completion costs and replacement costs.

Exam 4: Inventories

AASB 102 Inventories requires that when inventories are written down to net realisable value, they are written-down:

Under the periodic inventories approach, how is the cost of goods sold during a period determined?

When an entity's operating cycle is not clearly identifiable it is assumed to be:

The weighted average inventories costing method is particularly suitable to inventories where:

Which of the following is an appropriate journal entry to recognise inventories items that have been lost:

Net realisable value of inventories may fall below cost for a number of reasons including which of the following:

AASB 102 requires disclosure of which of the following:

If the selling price of inventories that has been written down to net realisable value in a prior period, subsequently recovers, the:

Commodity broker traders are able to measure their inventories at:

The measurement rule for inventories, mandated by AASB 102 Inventories, is:

Accounting Regulation and the Conceptual Framework

Application of Accounting Theory

Fair Value Measurement

Property, Plant and Equipment

Intangible Assets

Impairment of Assets

Provisions, Contingent Liabilities and Contingent Assets

Employee Benefits

Leases

Financial Instruments

Income Taxes

Share Capital and Reserves

Share-Based Payment

Revenue

Presentation of Financial Statements

Statement of Cash Flows

Accounting Policies and Other Disclosures

Earnings Per Share

Operating Segments

Related Party Disclosures

Sustainability and Corporate Social Responsibility Reporting

Foreign Currency Transactions and Forward Exchange Contracts

Translation of Foreign Currency Financial Statements

Business Combinations

Consolidation: Controlled Entities

Consolidation: Wholly Owned Entities

Consolidation: Intragroup Transactions

Consolidation: Non-Controlling Interest

Consolidation: Other Issues

Associates and Joint Ventures

Joint Arrangements

Insolvency and Liquidation

Accounting for Mineral Resources

Agriculture

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