Inventories

Question 1

FOB Shipping point

Answer 1

Title passes to the buyer when the seller delivers the goods tot he common carrier

Question 2

FOB destination

Answer 2

Title passes to buyer when the buyer receives the goods.

Question 3

periodic Inventory system

Answer 3

Physical count of goods

Question 4

Physical inventory system

Answer 4

real time counting of goods

Question 5

Dollar Value LIfo Calculation

Answer 5

year ending inventory/ index value =base@ indexvalue

then multiply layer with index

Question 6

LCM or cost

Answer 6

Cost= Original Cost
Ceiling =Net Reliazable value (selling price-disposal costs)
Floor= NRV-Normal profit margin
Replacement cost= Purchase or reproduction

Question 7

Under IFRS

Answer 7

LCNRV( Lower of cost or NRV)

Question 8

Inventory valuation methods or estimations

Answer 8

Gross profit Margin Methods
Retail Inventory Methods
1) Conventional retail inventory methods
2) Lifo retail Inventory method

Question 9

What is NRV, Replacement,Floor

Answer 9

NRV= Sales Price-Cost of Disposal
Floor=NRV-PF
Replacement cost usually given

Question 10

If ending inventory is higher

Answer 10

Cost of goods sold is lower and pre tax income is higher

Question 11

when the beginning inventory is understated

Answer 11

COGS will be understated

Question 12

Under IFRS

Answer 12

The costs to sell the asset must be included in the calculation of the recoverable amount. The recoverable amount of an asset is the higher of its fair value minus costs to sell and its value in use