When may standard cost or retail methods be used?
AIf results approximate actual cost
BIf the auditor insists on them
CIf prices remain stable
DIf they are cheaper than FIFO
Answer & Solution
Correct answer: A. If results approximate actual cost
These convenience techniques are acceptable only if they produce a figure close to actual cost.
Keep practising Valuation of Inventories (AS 2)
Browse all Valuation of Inventories (AS 2) questions for CA Inter, or explore more Accounting topics.
Related questions
Which cost may be added to inventory cost as an other cost?Which classification covers goods acquired for trading in AS 2?Which items can be grouped for NRV write-down?When may actual output be used to allocate fixed overheads?Under AS 2, what does normal capacity mean?NRV counts later price changes if they do what?How are maintenance supplies and loose tools awaiting use treated?How is software bought for resale classified under AS 2?