CFAS - Chapter 10: PAS 10 - Inventories
CFAS - Chapter 10: PAS 10 - Inventories
CFAS - Chapter 10: PAS 10 - Inventories
1. Abnormal cost of cost are excluded from the cost of 16. FIFO accordance with the ordinary merchandising
wasted materials inventories and recognized as expenses procedure that the goods are sold in the
Storage cost in the period when incurred: order they are purchased
Administrative
17. FIFO this method favors the statement of financial
overheads
position in that the inventory is stated at
Distribution or
current replacement cost
selling costs
18. Finished The inventories of a manufacturing concern
2. Allowance method the writendown of inventory to net
Goods are:
realizable value is accounted for using
Goods in
____________________
process
3. average unit cost computed by dividing the total cost of Raw materials
goods available for sale by the total Factory or
number of units available for sale manufacturing
supplies
4. Capitalized storage cost on goods in process are
_____________ 19. Finished Inventories encompass that awaiting use in
goods the production process
5. Cost is lower than if the _________________________, there is no
produced
realizable value accounting problem because the
Goods in
inventory is stated at cost and the
process
increase in value is not recognized
Materials and
6. Cost of conversion includes cost directly related to the supplies
units of production such as direct labor
20. Fixed indirect cost of production that remains
7. Cost of conversion it also includes a systematic allocation production relatively constant regardless of the volume
of fixed and variable production overhead of production
overhead that is incurred in converting
21. Goods Inventories encompass
materials into finished goods.
purchased Example:
8. Cost of purchase comprise the purchase price, import Held for a. Merchandise purchased by a retailer and
duties and irrecoverable taxes, freight, resale held for resale
handling and other costs directly b. Land and other property held for resale
attributable to the acquisition of by a subdivision entity and real estate
finished goods, materials and services. developer
9. Cost of purchase 3 Cost of inventories 22. inflation/rising the FIFO method would result to the highest
Cost of conversion prices net income
Other cost
23. Inventories held for sale in the ordinary course for
10. declining prices the LIFO method would result to the business
highest net income.
11. deflation/declining the FIFO method would result to the process of production for such sales or in
prices lowest net income the form of materials