Start learning →

CA Inter Inventory Valuation — practice questions

Explore 66 free Inventory Valuation questions in CA Inter Cost and Management Accounting. Open each question or exercise to read its content, reference answers and available explanation.

Practise Inventory Valuation with Quill →

Inventory Valuation questions and exercises with answers

Showing questions 1–30 of 66.

Which inventory system keeps records showing stock on hand at all times?Read the answer and worked solution →Under which system are sales recorded but inventory not updated at once?Read the answer and worked solution →In the periodic system, a purchase of goods is debited to which account?Read the answer and worked solution →Under the perpetual system, each sale needs an extra entry debiting which account?Read the answer and worked solution →At minimum, how often should a physical inventory be taken, whatever the system?Read the answer and worked solution →At what value should damaged or obsolete goods be recorded?Read the answer and worked solution →If market price falls below purchase price, which valuation is recommended?Read the answer and worked solution →The retail inventory method uses which ratio to estimate ending inventory?Read the answer and worked solution →Which method assumes cost flow in reverse chronological order of purchase?Read the answer and worked solution →Which method bases cost flow on a weighted average of goods?Read the answer and worked solution →What does HIFO stand for in inventory costing?Read the answer and worked solution →When a physical count is impractical, which pair of methods can estimate inventory?Read the answer and worked solution →Under FIFO, which cost is expensed first?Read the answer and worked solution →In a period of rising prices, FIFO gives what compared with LIFO?Read the answer and worked solution →Which cost flow method most closely mimics the actual flow of goods?Read the answer and worked solution →Which standards banned LIFO for financial reporting?Read the answer and worked solution →The difference between FIFO and LIFO inventory cost is called what?Read the answer and worked solution →Under LIFO, which items are recorded as sold first?Read the answer and worked solution →A supermarket selling perishables typically manages physical stock on which flow?Read the answer and worked solution →Lots: 100 units at Rs 10, 200 at Rs 12, 100 at Rs 14. Under first-in first-out, a 250 unit issue costs?Read the answer and worked solution →Using last-in first-out, what does a 250 unit issue cost if lots arrived as 100 at Rs 10, 200 at Rs 12 and 100 at Rs 14?Read the answer and worked solution →400 units cost Rs 4,800 in total (lots at Rs 10, 12, 14). A 250 unit issue at average cost is?Read the answer and worked solution →Stock lots 100 at Rs 10, 200 at Rs 12, 100 at Rs 14, FIFO. What are the 150 units left worth?Read the answer and worked solution →After a LIFO issue of 250 units from lots 100 at Rs 10, 200 at Rs 12, 100 at Rs 14, value the rest.Read the answer and worked solution →Stock: 100 at Rs 10, 200 at Rs 12, 100 at Rs 14. How much higher is LIFO than FIFO cost for 250 issued?Read the answer and worked solution →Two lots arrive: 50 units at Rs 20 and later 50 at Rs 24. Issuing 60 units on a first-in first-out basis costs how much?Read the answer and worked solution →A firm buys 50 units at Rs 20 and then 50 at Rs 24. Pricing a 60 unit issue by last-in first-out gives what cost?Read the answer and worked solution →A pool of 100 units costs Rs 2,200 in total (half at Rs 20, half at Rs 24). What do 60 units cost at the average rate?Read the answer and worked solution →After 60 of 100 units are issued by LIFO, what are the 40 left worth? Lots were 50 at Rs 20 and 50 at Rs 24.Read the answer and worked solution →Goods cost Rs 500 and sell for Rs 650 after Rs 80 of disposal expenses. What is NRV?Read the answer and worked solution →

Worked practice questions

Which inventory system keeps records showing stock on hand at all times?

  1. Physical count only
  2. Perpetual system
  3. Periodic system
  4. Retail estimation
Show answer and solution

Correct answer: B. Perpetual system

A perpetual system updates a ledger account for each item whenever stock is added or issued.

Open this question →

Under which system are sales recorded but inventory not updated at once?

  1. Perpetual system
  2. Weighted average
  3. Standard costing
  4. Periodic system
Show answer and solution

Correct answer: D. Periodic system

The periodic system leaves stock untouched until a year-end physical count fixes the closing figure.

Open this question →

In the periodic system, a purchase of goods is debited to which account?

  1. Purchases account
  2. Sales returns
  3. Cost of goods sold
  4. Inventory account
Show answer and solution

Correct answer: A. Purchases account

Periodic records debit a separate Purchases account, whereas the perpetual system debits Merchandise Inventory directly.

Open this question →

How to practise

  1. Choose a Inventory Valuation question and try to work out your answer.
  2. Open the question to check the correct answer and read its worked solution.
  3. Continue in the app for bite-sized lessons, explanations and review with Quill. You can start without creating an account.

More Cost and Management Accounting topics

Cost SheetProcess CostingCost AccountingMarginal CostingEmployee CostActivity Based CostingBudgets and Budgetary ControlJob Costing