TRUE OR FALSE 1. According to PAS 2, inventories are measured at net realizable value. 2. According to PAS 2, net realizable value and fair value less costs to sell are the same. 3. Storage costs of part-finished goods may be included in the cost of inventory. but not storage costs of finished goods. 4. Trade discounts are added to the cost of inventories. 5. Import duties, freight-in and non-refundable purchase taxes form part of the cost of inventories. 6. Raw materials inventory is not written down below cost if the finished goods to which they will be incorporated are expected to be sold at or above cost. 7. Reversals of inventory write-downs may exceed the amount of the original write-down previously recognized. The cost of factory management is included in the cost of inventory. 9. The maintenance costs of a machine used in the manufacturing process are not included in the cost of inventories. 10. If the cost of an inventory is P8 while its net realizable value is P6, the amount of write down is 2.
TRUE OR FALSE 1. According to PAS 2, inventories are measured at net realizable value. 2. According to PAS 2, net realizable value and fair value less costs to sell are the same. 3. Storage costs of part-finished goods may be included in the cost of inventory. but not storage costs of finished goods. 4. Trade discounts are added to the cost of inventories. 5. Import duties, freight-in and non-refundable purchase taxes form part of the cost of inventories. 6. Raw materials inventory is not written down below cost if the finished goods to which they will be incorporated are expected to be sold at or above cost. 7. Reversals of inventory write-downs may exceed the amount of the original write-down previously recognized. The cost of factory management is included in the cost of inventory. 9. The maintenance costs of a machine used in the manufacturing process are not included in the cost of inventories. 10. If the cost of an inventory is P8 while its net realizable value is P6, the amount of write down is 2.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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TRUE OR FALSE
1. According to PAS 2, inventories are measured at net realizable value.
2. According to PAS 2, net realizable value and fair value less costs to sell are the same.
3. Storage costs of part-finished goods may be included in the cost of inventory. but not storage costs of finished goods.
4. Trade discounts are added to the cost of inventories.
5. Import duties, freight-in and non-refundable purchase taxes form part of the cost of inventories.
6. Raw materials inventory is not written down below cost if the finished goods to which they will be incorporated are expected to be sold at or above cost.
7. Reversals of inventory write-downs may exceed the amount of the original write-down previously recognized. The cost of factory management is included in the cost of inventory.
9. The maintenance costs of a machine used in the manufacturing process are not included in the cost of inventories.
10. If the cost of an inventory is P8 while its net realizable value is P6, the amount of write down is 2.
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