IAS 2 Inventories Question Answers IAS 2 is the International Accounting Standard 2.It is a standard issued by the International Accounting Standards Board (IASB). This standard deals with the accounting treatment of inventories with disclosure requirements. This standard guide us…
In this article, we will understand Inventory valuation using Weighted Average Problems and Solutions. If you want to understand LIFO and FIFO, you can read our previous articles using these links: FIFO LIFO Weighted Average Problem Mr. Kevin started its…
Under this method, we estimate the ending figure of the closing inventory based on the gross profit percentage. In this approach, we assume that the gross profit % remains constant during the reporting period. This method is also known as…
Under this method, we calculate a pre-determined price, and this price is kept constant for a definite time period. In this method of inventory valuation, we post all receipts into the stock ledger account and sales/ issues are valued at…
There are several methods of inventory valuation and FIFO is one of them. Under this method, we assume that items purchased first are also sold first. It means that the remaining inventory/closing inventory is the one which is purchased/ manufactured…
1.The main objective of bill of material is: Fixed asset requisition Material requisition None of the above 2.Abnormal loss of material ———— absorbed into the cost of production. Is Is not 3.Defective items can be —— after incurring some additional…
Replacement Price Method is a very effective tool when the entity wants to reflect the current price in cost. By replacement price we mean the price at which the materials would be replaced, that is the market price at the…
There are several methods of inventory valuation and LIFO is one of them. Under this method, we assume that items purchased last are also sold first. It means that the remaining inventory/closing inventory is the one which is purchased/ manufactured…
1.FIFO is a method of valuing: Inventories Fixed assets Company 2.FIFO is a acronym of: Fist in first order First in first out First in first obtained 3.When cost are increasing, FIFO method reports higher net income as compared to:…
1. The weighted average method divides the cost of goods available for sale by the number of units: Available for sale Sold Purchased during the period 2. Cost of goods available for sale can be calculated by: Opening stock +…