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CA Final Ind AS 2 Inventories and Ind AS 16 Property, Plant and Equipment — practice questions

Explore 52 free Ind AS 2 Inventories and Ind AS 16 Property, Plant and Equipment questions in CA Final Financialreporting. Open each question or exercise to read its content, reference answers and available explanation.

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Ind AS 2 Inventories and Ind AS 16 Property, Plant and Equipment questions and exercises with answers

Showing questions 1–30 of 52.

On what basis must inventories be measured under Ind AS 2?Read the answer and worked solution →Timber held to make tables is classified by a furniture maker as what?Read the answer and worked solution →Which of these is a cost of conversion of inventories?Read the answer and worked solution →Which cost is a variable production overhead?Read the answer and worked solution →Fixed production overheads are allocated using which capacity?Read the answer and worked solution →Which cost may form part of inventory cost?Read the answer and worked solution →A unit of stock costs Rs 8,000 and could be sold for Rs 9,400 with no further costs. At what amount is it carried?Read the answer and worked solution →Materials Rs 40,000, labour Rs 9,000, variable overheads Rs 3,000, fixed overheads Rs 4,000. Cost of goods?Read the answer and worked solution →Materials Rs 10,000, labour Rs 2,000 and overheads Rs 1,000 make goods costing how much?Read the answer and worked solution →Under FIFO, which inventory cost is expensed first?Read the answer and worked solution →Under LIFO, which units are treated as sold first?Read the answer and worked solution →Which cost formula is not permitted for inventories under IFRS and Ind AS 2?Read the answer and worked solution →In rising prices, what does FIFO show versus LIFO?Read the answer and worked solution →When purchase prices keep rising, which method reports the higher gross profit?Read the answer and worked solution →Closing stock is Rs 9,800 under FIFO and Rs 8,900 under LIFO. What is the LIFO reserve?Read the answer and worked solution →A trader buys 100 units at Rs 20 and then 100 units at Rs 25, and sells 150 units. What is the FIFO cost of goods sold?Read the answer and worked solution →A shop buys 100 units at Rs 30, then 80 units at Rs 34. It sells 160 units. What closing stock value results under FIFO?Read the answer and worked solution →Why might a supermarket use FIFO for shelving?Read the answer and worked solution →Which cost formula most closely mimics the usual physical flow of goods?Read the answer and worked solution →Where does inventory appear on the balance sheet?Read the answer and worked solution →How does Ind AS 16 define PPE by expected use?Read the answer and worked solution →PPE are tangible items held for which of these purposes?Read the answer and worked solution →Which asset is outside the scope of IAS 16 and Ind AS 16?Read the answer and worked solution →Which conditions allow PPE to be recognised?Read the answer and worked solution →At what amount is an item of PPE initially measured?Read the answer and worked solution →Which item is included in the initial cost of an item of PPE?Read the answer and worked solution →Which cost is directly attributable to a machine?Read the answer and worked solution →Machinery costs Rs 1,00,000 and installation Rs 5,000. At what cost is it recorded?Read the answer and worked solution →Machine Rs 6,40,000, delivery Rs 25,000, installation Rs 15,000, dismantling estimate Rs 20,000. Initial cost?Read the answer and worked solution →How may a class of PPE be measured after recognition?Read the answer and worked solution →

Worked practice questions

On what basis must inventories be measured under Ind AS 2?

  1. Replacement cost at the reporting date
  2. Higher of cost and net realisable value
  3. Fair value at each reporting date
  4. Lower of cost and net realisable value
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Correct answer: D. Lower of cost and net realisable value

Inventories are carried at the lower of cost and NRV so that assets are not shown above the amount they can realise.

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Timber held to make tables is classified by a furniture maker as what?

  1. Plant and equipment
  2. Inventory material
  3. Investment property
  4. Intangible asset
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Correct answer: B. Inventory material

Materials that will be consumed in the production process fall within the definition of inventories.

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Which of these is a cost of conversion of inventories?

  1. Freight paid on raw materials purchased
  2. Import duty paid on raw materials
  3. Customs clearance for imported goods
  4. Direct labour on the production line
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Correct answer: D. Direct labour on the production line

Costs of conversion are costs directly related to units of production, and direct labour is the standard example.

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More Financialreporting topics

Ind AS 116 LeasesInd AS 36 Impairment of Assets and Ind AS 38 Intangible AssetsInd AS 24 Related Party Disclosures and Ind AS 108 Operating SegmentsInd AS 1 Presentation of Financial StatementsInd AS 12 Income TaxesInd AS 113 Fair Value MeasurementInd AS 109 Financial InstrumentsInd AS 23 Borrowing Costs and Ind AS 40 Investment Property