Inventories

Question 1

Under a ________ inventory system, inventory

values and costs of sales are determined at the end of an accounting period.

Answer 1

periodic

Question 2

Under a ________ inventory system, inventory values and cost of sales are continuously updated to reflect purchases and sales.

Answer 2

perpetual

Question 3

The _________ is the difference between the reported LIFO inventory carrying amount
and the inventory amount that would have been reported if the FIFO method had
been used (in other words, the FIFO inventory value less the LIFO inventory value)

Answer 3

LIFO reserve

Question 4

IFRS state that inventories shall be measured (and carried on the balance sheet) at the
lower of ____ and _______.

Answer 4

cost, net realisable value

Question 5

Under IFRS, identifiable intangible assets must meet three definitional criteria

Answer 5

(1) identifiable (either capable of being separated from the entity or arising from contractual or legal rights), (2) under the control of the company, and (3)
expected to generate future economic benefits. In addition, two recognition criteria
must be met: (1) It is probable that the expected future economic benefits of the
asset will flow to the company, and (2) the cost of the asset can be reliably measured.

Question 6

As noted above, companies generally must _______ interest costs associated with
acquiring or constructing an asset that requires a long period of time to get ready for its intended use.

Answer 6

capitalise