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FAR > Inventory > Flashcards

Inventory Flashcards

1
Q

Valuation of Inventory

A

Lower of Cost or Net realizable Value
*(estimated selling price less estimated cost of completion and disposal)

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2
Q

Cost of Inventories:

A

Cost of Purchase
Cost of Conversion
Other Costs*

*only to the extent that they are incurred in bringing the inventories to their present location and condition.

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3
Q

Purchase Price, Import Duties and Taxes, Freight, Handling and Other Direct Acquisition Costs (minus trade discounts, rebates, and other similar items)

A

Cost of Purchases

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4
Q

Direct Labor and Overhead incurred in the conversion.

A

Cost of Conversion

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5
Q

FOB shipping point

A

Included in Buyer inventory

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6
Q

FOB seller

A

Included in Buyer inventory

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7
Q

FOB FAS (free alongside ship)

A

Included in Buyer inventory

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8
Q

FOB CIF (cost, insurance, and freight)

A

Included in Buyer inventory

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9
Q

Bill and Hold arrangement

A

Included in Buyer inventory

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10
Q

Sold on installment

A

Included in Buyer inventory

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11
Q

Sale on with high probability of return

A

Included in Buyer inventory

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12
Q

Goods manufactured at customer’s specification (special order)

A

Included in Buyer inventory

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13
Q

FOB destination

A

Included in Seller inventory

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14
Q

FOB buyer

A

Included in Seller inventory

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15
Q

FOB ex-ship

A

Included in Seller inventory

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16
Q

Sale with buyback agreement

A

Included in Seller inventory

17
Q

Sale under inventory financing

A

Included in Seller inventory

18
Q

Hold for shipping instruction

A

Included in Seller inventory

19
Q

Sale on trial/approval

A

Included in Seller inventory

20
Q

Inventory pledged

A

Included in Seller inventory

21
Q

Presentation of Inventory

A

Current Assets, Cost of Sales, Operating Expense

22
Q

Unsold or remaining goods or items.

A

Current Assets

23
Q

Sold goods or items.

A

Cost of Sales

24
Q

Used office and store supplies.

A

Operating Expenses

25
Q

Cost Formulas expressly provided in PAS 2.

A

FIFO and Weighted Average

26
Q

The goods first purchased are first sold.

A

FIFO

27
Q

Weighted average unit cost is computed by…

A

Dividing the total COGS available for sale by the total number of units available for sale.

28
Q

Under this method, a new weighted average unit cost must be computed after every purchase and purchase return.

A

Perpetual Weighted Average.

29
Q

Owner of the goods pays for the…

A

Freight

30
Q

Owner of the goods pays for the…

A

Freight

FAR (12 decks)

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