FAR Mcqs

1.
It is the assets held for sale in the ordinary course of production for such sale or in the form be
consumed in the production process business.
A. inventories of manufacturing concern.

B. inventories of a trading concern.
C. Inventories.
D. Cost of inventories.
2. which are not inventories of a manufacturing concern
A. Finished goods
B. Goods in process
C. Raw materials
D. Manufacturing materials
3. The term "______" is generally applied to goods held by a trading concern.
A. Trading merchandizing
B. Merchandise inventory
C. Inventories
D. Business inventory
4. Inventories are broadly classified into two, namely
A. Finished goods and Goods in process

B. Raw materials and Factory or manufacturing supplies
C. Business inventory and Merchandise inventory
D. Inventories of a trading concern and
inventories of manufacturing concern.
5. The cost of inventories shall comprise:
A. Cost of purchase
B. Cost of conversion
C. other cost incurred in bringing the inventories to their present location and condition
D. All of the Above
6. A trading concern is one that buys and sells goods in the same form?
A. Purchased
B. Buyer
C. Seller
D. Owner
7. The _____ of inventories includes cost directly related to the units of production such as direct labor.
A. Inventories B. Classes of inventories
C. Cost of purchase D. Cost of conversion

8. The _____ of inventories comprises the purchase price, import duties and irrecoverable taxes, freight.
A. Inventories
B. Classes of inventories
C. Cost of purchase
D. Cost of conversion
9. A ______ concern in one that buys goods which are altered or converted into another form before
they are made altered of available for sale.
A. Business concern
B. Partnership concern
C. Manufacturing concern
D. Trading concern
10. A ______ is one that buys and sells goods in the same form purchased.
A. Business concern
B. Partnership concern
C. Manufacturing concern
D. Trading concern
11. It is included in the cost of inventories only to the extent that it is incurred in bringing the inventories
to their present location and condition.
A. Other Cost
B. Cost of service
C. Cost of Inventories
D. Cost of Manufacturing
12. The following costs are excluded from the cost of inventories and recognized as expenses in the
period when incurred:
A. Abnormal amounts of wasted materials

B. labor and other production costs.
C. Administrative overheads
D. All of the Above
13. The _____ consists primarily of the labor and other costs of personnel directly engaged in providing
the service.
A. Cost of inventories of a decision-making provider

B. Cost of inventories concern of a service provider
C. Cost of inventories of a service provider
D. None of the Above
14. Cost formula expressly provides that the cost of inventories shall be determined by using either:
A. First in, first in B. First out, first out C. First in, first out D. None of the Above
15. First in, first out (FIFO) the FIFO method assumes that?
A. "The goods first purchased are second sold"

B. "The goods second purchased are not sold"
C. "The goods first purchased are first sold"
D. "The goods not purchased are first sold"
16. Labor and other costs relating to sales and general administrative personnel are not included but are
recognized as expenses in the period in which they incurred.
A. Yes! Not included

B. No! It’s included
C. Maybe not and maybe it is included
D. Next question please!
17. The _____ is thus expressed in terms of recent or new prices while the cost of goods sold is
representative of earlier or old prices.
A. Business
B. Owners
C. Inventory
D. Seller
18. Such _______ cost is then multiplied by the units on hand to derive the inventory value.
A. Total cost
B. Weighted Average unit cost
C. Inventory cost
D. Labor Cost
19. The LIFO method assumes that the goods last purchased are first sold and not consequently the
goods remaining in the inventory at the end of the period are those first purchased or produced?
A. Yes!
B. No!
C. Next question please!
D. All of the Above is correct!
20. The ____ means that specific costs are attributed to identified items of inventory.
A. Cost of purchase
B. Classes of inventories
C. Specific identification
D. Cost of conversion
21. The measurement of inventory at the LCNRV lower of cost and net realizable value is known as?
A. Lower of camaraderie and net realizable value

B. Lower of costumer and net realizable value
C. Lower of cost and next realizable value
D. Lower of cost and net realizable value
22. The cost of inventory is determined using either? FIFO cost or average cost.
A. FIFO cost or average cost.

B. LIFO cost or average cost.
C. Allowance method or average cost.
23. NRV stands for?
A. Net revenue value

B. Next resources value
C. Net realizable value
24. Which the cost of inventories may not be recoverable under the following circumstances
A. The inventories damaged

B. The inventories have become wholly or partially obsolete
C. The estimated cost of completion or the estimated cost of disposal has increased.
D. All of the Above
25. The estimated selling price in the ordinary course of business less the estimated cost of completion
and the estimated cost of disposal.
A. FIFO
B. LIFO
C. NRV
D. LCNRV
26. If the cost is lower than net realizable value?
A. The inventory is measured at net realizable value

B. The inventory is stated at cost and the increase in value is not recognized.
C. Writedown the increase in value
27. If the net realizable value is lower than cost?
A. The inventory is measured at net realizable value

B. The inventory is stated at cost and the increase in value is not recognized.
C. Writedown the increase in value
28. The writedown of inventory to net realizable value is accounted for using the _____.
A. Inventory Method
B. Allowance Method
C. Strategic Method
D. Accounting Method
29. Allowance method the inventory is recorded at cost and any loss on inventory writedown is
accounted for separately, Namely the two accounts
A. Year-end account and Monthly expenses account

B. Reversal of inventory account and gain account
C. Inventory account and Purchased account
D. Loss account and valuation account
30. The allowance method is used in order that the effects of writedown and reversal of writedown can
be?
A. Skeptical
B. Clearly identified
C. Not transparent

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1.

A. inventories of manufacturing concern.

2. which are not inventories of a manufacturing concern

3. The term "______" is generally applied to goods held by a trading concern.

4. Inventories are broadly classified into two, namely

A. Finished goods and Goods in process

5. The cost of inventories shall comprise:

A. Inventories B. Classes of inventories

C. Cost of purchase D. Cost of conversion

A. Abnormal amounts of wasted materials

A. Cost of inventories of a decision-making provider

A. "The goods first purchased are second sold"

A. Yes! Not included

A. Lower of camaraderie and net realizable value

A. FIFO cost or average cost.

23. NRV stands for?

A. Net revenue value

A. The inventories damaged

26. If the cost is lower than net realizable value?

A. The inventory is measured at net realizable value

27. If the net realizable value is lower than cost?

A. The inventory is measured at net realizable value

A. Year-end account and Monthly expenses account

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