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CA Foundation Inventories — practice questions — page 3

Explore 78 free Inventories questions in CA Foundation Accounting. Open each question or exercise to read its content, reference answers and available explanation.

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Inventories questions and exercises with answers

Showing questions 61–78 of 78.

Inseparable joint product conversion costs are allocatedRead the answer and worked solution →Invoice Rs 1,00,000 less Rs 5,000 trade discount; recoverable tax Rs 18,000 extra; freight Rs 2,000. Cost?Read the answer and worked solution →Material 50,000, labour 20,000, fixed overhead 10,000, selling 5,000, abnormal waste 3,000. Cost?Read the answer and worked solution →100 units cost Rs 40 each, sell at Rs 55 less Rs 20 selling cost each. Write-down?Read the answer and worked solution →Item A cost 8,000, NRV 7,200; item B cost 5,000, NRV 6,000. Item-wise stock value?Read the answer and worked solution →Bought 50 at Rs 20, then 50 at Rs 24; sold 70. FIFO cost of goods sold?Read the answer and worked solution →The concept of LIFO treats which units as sold first?Read the answer and worked solution →The gap between FIFO and LIFO inventory values is called theRead the answer and worked solution →Under the perpetual system, a purchase of goods is debited toRead the answer and worked solution →Which system needs a physical count at year end to find cost of goods sold?Read the answer and worked solution →Opening stock 40,000; purchases 1,60,000; sales 2,00,000; gross profit 25% of sales. Closing stock?Read the answer and worked solution →Which inventory method most closely mimics the physical flow of goods?Read the answer and worked solution →The cost of inventories may be unrecoverable if stock isRead the answer and worked solution →Costs of conversion include costs directly related to units, such asRead the answer and worked solution →Which three heads make up the cost of inventories?Read the answer and worked solution →Stock on 5 April is 2,40,000; April 1-5 sales 50,000 at 25% on cost, purchases 15,000. Stock on 31 March?Read the answer and worked solution →Which items count as inventories held as materials or supplies?Read the answer and worked solution →Land held for resale by a dealer is classified asRead the answer and worked solution →

Worked practice questions

Inseparable joint product conversion costs are allocated

  1. only to the by-product
  2. on a consistent rational basis
  3. equally to every product
  4. to the first product made
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Correct answer: B. on a consistent rational basis

Common conversion costs are split between joint products on a rational and consistent basis, such as relative sales value.

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Invoice Rs 1,00,000 less Rs 5,000 trade discount; recoverable tax Rs 18,000 extra; freight Rs 2,000. Cost?

  1. Rs 1,15,000
  2. Rs 97,000
  3. Rs 1,05,000
  4. Rs 1,13,000
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Correct answer: B. Rs 97,000

Cost = 1,00,000 - 5,000 + 2,000 = Rs 97,000; the Rs 18,000 tax is recoverable from the authorities so it is excluded.

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Material 50,000, labour 20,000, fixed overhead 10,000, selling 5,000, abnormal waste 3,000. Cost?

  1. Rs 88,000
  2. Rs 83,000
  3. Rs 78,000
  4. Rs 80,000
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Correct answer: D. Rs 80,000

Only 50,000 + 20,000 + 10,000 = Rs 80,000 is cost; selling cost and abnormal waste are expensed.

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