Chapter 7 (Inventories)

Question 1

a. held for distribution or sale; ordinary course (finished goods)
b. in the process of production for s or D (work in process)
c. materials/ supplies to be consumed in the production process (raw materials and supplies)

Answer 1

Inventories – assets

Question 2

medicines for sale by gov

Answer 2

Inventory held for sale

Question 3

rice & welfare goods for D

Answer 3

Inventory held for distribution

Question 4

raw materials, work in process

Answer 4

Inventory held for manufacturing

Question 5

office supplies

Answer 5

Inventory held for consumption

Question 6

machinery, equipment below 15K

Answer 6

Semi expandable property

Question 7

Initial Measurement of Inv

Answer 7

• Cost

Question 8

Subsequent measurements held for sale

Answer 8

lower of cost & net realizable value

Question 9

Subsequent measurement held for distribution

Answer 9

lower of cost & current replacement

Question 10

• Purchase cost; except: trade discounts, rebate
• Direct cost bring asset intended location
• Excludes abnormal accounts of wasted materials, labor; selling costs; administrative overheads

Answer 10

Costs

Question 11

Initial measurement Inventories from non exchange

Answer 11

FV (date of acquisition)

Question 12

Initial Measurement Agricultural produce

Answer 12

FV less cost to sell

Question 13

cost incur to acquire the asset

Answer 13

Current replacement cost

Question 14

– selling price minus cost of completion and selling disposal cost

Answer 14

Net realizable Value

Question 15

Cost formulas
1. Specific identification
2. Weighted Average cost

Answer 15

Cost formulas

Question 16

used for items not ordinarily interchangeable (unique); specific cost (identified items of inv)

Answer 16

1. Specific identification

Question 17

large numbers of inve ordinarily interchangeable (PERPETUAL INVENTORY SYSTEM

Answer 17

2. Weighted Average cost –

Question 18

expense when sold. Distributed, exchanged or consumed

Answer 18

Carrying amount of Inv

Question 19

1. End users prepare purchase request
   - Individuals using the items
2. Authorized official prepare purchase order
   - Document issued to supplier (quantity, price)
3. Purchase items delivered, property/supply division signs “received and prepares inspections and acceptance report
   - Forward DR, IAR, PO to Property inspector
4. Property inspector conformance of items
   - Forward copies to property/supply div and accounting div
5. Stock card keeper records delivered items (stock card)
6. Accounting div records accepted deliveries in book of accounts and supplies ledger account)
7. Property/ supply div prepares disbursement voucher

Answer 19

Receipt

Question 20

8. End users prepare the Requisition and issue slip (RIS)
9. Property/ supply div prepare report of supplies and materials issued (RSMI)
10. Account div records items & update SLC
11. Other documents
    - Waste material report (destroyed spare parts; property/supply custodian)
    - Report on the physical count of inventoies (balance of inventory; shortage/overage)
    - Report of accountability for accountable forms (status of accountable forms; officer)
    - Inventory custodian slip (issuing semi expandable property)

Answer 20

Disposition

Question 21

(destroyed spare parts; property/supply custodian)

Answer 21

• Waste material report

Question 22

balance of inventory; shortage/overage)

Answer 22

• Report on the physical count of inventoies

Question 23

status of accountable forms; officer)

Answer 23

• Report of accountability for accountable forms