Inventory Valuation

20 Questions | Total Attempts: 212

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Inventory Quizzes & Trivia

Questions and Answers
  • 1. 
    If Average Stock = Rs 12,000. Closing stock is Rs 3,000 more than opening stock then the value of closing stock will be
    • A. 

      Rs 12,000

    • B. 

      Rs 24,000

    • C. 

      Rs 10,500

    • D. 

      Rs 13,500

  • 2. 
    O Ltd. maintains the inventory records under perpetual system of inventory. Consider the following data pertaining to inventory of O Ltd. held for the month of March 2005: Date        Particulars                       Quantity                               Cost Per unit (Rs.)  Mar. 1   Opening Inventory              15                                          400 Mar. 4    Purchases                            20                                          450 Mar. 6    Purchases                           10                                           460 If the company sold 32 units on March 24, 2005, closing inventory under FIFO method is
    • A. 

      Rs.5,200

    • B. 

      Rs.5,681

    • C. 

      Rs.5,800

    • D. 

      Rs.5,950

  • 3. 
    Under inflationary conditions,_________ method will show highest  value of closing stock?
    • A. 

      FIFO

    • B. 

      LIFO

    • C. 

      Weighted Average

    • D. 

      None of the above

  • 4. 
    Sales for the year ended 31st March, 2005 amounted to Rs. 10,00,000. Sales included goods sold to Mr. A for Rs. 50,000 at a profit of 20% on cost. Such goods are still lying in the godown at the buyer's risk. Therefore, such goods should be treated as part of
    • A. 

      Sales.

    • B. 

      Closing stock

    • C. 

      Goods in transit.

    • D. 

      Sales return

  • 5. 
    A Company wishes to earn a 20% profit margin on selling price. Which of the following is the profit mark up on cost, which will achieve the required profit margin?
    • A. 

      33%

    • B. 

      25%

    • C. 

      20%

    • D. 

      None of the above

  • 6. 
    The total cost of goods available for sale with a company during the current year is Rs.12,00,000 and the total sales during the period are Rs.13,00,000. If the gross profit margin of the company is 331/3 % on cost, the closing inventory during the current year is
    • A. 

      Rs.4,00,000

    • B. 

      Rs.3,00,000

    • C. 

      Rs.2,25,000

    • D. 

      Rs.2,60,000

  • 7. 
    E Ltd., a dealer in second-hand cars has the following five vehicles of different Models and makes in their stock at the end of the financial year 2004-2005: Car    Fiat            Ambassador   MarutiEsteem   Maruti 800       Zen Cost  90,000      1,15,000           2,75,000                1,00,000      2,10,000 Net realisable value (Rs.) 95,000 1,55,000 2,65,000 1,25,000 2,00,000 The value of stock included in the balance sheet of the company as on March 31, 2005 was
    • A. 

      Rs.7,62,500

    • B. 

      Rs.7,70,000

    • C. 

      Rs.7,90,000

    • D. 

      Rs.8,70,000

  • 8. 
    Consider the following for Alpha Co. for the year 2005-06: Cost of goods available for sale Rs.1,00,000 Total sales Rs. 80,000 Opening stock of goods Rs. 20,000 Gross profit margin 25% Closing stock of goods for the year 2005-06 was
    • A. 

      Rs.80,000

    • B. 

      Rs.60,000

    • C. 

      Rs.40,000

    • D. 

      Rs.36,000

  • 9. 
    Consider the following data pertaining to a company for the month of March 2005; Particulars Rs. Opening stock 22,000 Closing stock 25,000 Purchases less returns 1,10,000 Gross profit margin (on sales) 20% The sales of the company during the month are
    • A. 

      Rs. 1,41,250

    • B. 

      Rs. 1,35,600

    • C. 

      Rs. 1,33,750

    • D. 

      Rs.1,28,400

  • 10. 
    C Ltd. recorded the following information as on March 31, 2005:                                                            Rs. Stock as on April 01, 2004        80,000 Purchases                                  1,60,000 Sales                                           2,00,000 It is noticed that goods worth Rs.30,000 were destroyed due to fire. Against this, the insurance company accepted a claim of Rs.20,000.The company sells goods at cost plus 33 1/3%. The value of closing inventory, after taking into account the above transactions is,
    • A. 

      Rs. 10,000

    • B. 

      Rs.30,000

    • C. 

      Rs. 1,00,000

    • D. 

      Rs.60,000

  • 11. 
    A purchased goods costing 42500. B sold goods costing Rs 40000 at Rs 50000. Balance goods were taken over by A at same gross profit percentage as in case of sale. The amount of goods taken over will be:
    • A. 

      Rs. 3125

    • B. 

      Rs. 2500

    • C. 

      Rs. 3000

    • D. 

      None of the above

  • 12. 
    Cost of physical stock on 15.4.06 was Rs.3,00,000.Sales amounting Rs.1,00,000 and purchases worth Rs.50,000 were held between 31.3.06 and 15.4.06.Goods are sold at a profit of 20% on sales.Value of inventory as on 31.3.06 is
    • A. 

      Rs.3,50,000

    • B. 

      Rs.2,70,000

    • C. 

      Rs.3,30,000

    • D. 

      Rs.3,00,000

  • 13. 
    Record of purchase of T.V. sets  Date                      Quantity                                   Price per unit                                   Units                                March 4                   900                                                 5 March 10                 400                                              5.50 Record of issues March 5                     600 March 12                  400 The value of T.V. sets on 15 March, as per LIFO will be
    • A. 

      Rs. 1,500

    • B. 

      Rs.1,650

    • C. 

      Rs.1,575

    • D. 

      None of the three.

  • 14. 
    A purchased a computer costing Rs.10,000. Repairing expenses Rs.1,000 and miscellaneous expenses Rs.500 were incurred by him. He sold the computer at 20% margin on selling price. The sales value will be
    • A. 

      Rs.12,500

    • B. 

      Rs. 11,000

    • C. 

      Rs. 14,375

    • D. 

      Rs.13,800

  • 15. 
    Goods costing Rs. 10,000 were sold at 1/6th profit on selling price. The sales will be of
    • A. 

      Rs.12,000.

    • B. 

      Rs. 12,500.

    • C. 

      Rs. 10,000.

    • D. 

      None of the three.

  • 16. 
    The following are the details regarding purchases of a certain item during the month of January. January 1              Purchases 200 units @Rs.7 Rs. 1,400 January 8              Purchases 900 units @Rs.8 Rs. 7,200 January 25            Purchases 300 units @Rs.9 Rs. 2,700 January 30            Purchases 400 units @Rs.10Rs.4,000                                                                                       -----------------                                                                                        RS.15,300                                                                                         ---------------- A physical inventory of the items taken on January 31 shows that there are 700 units in hand.The valuation of inventory as per FIFO method is :                                                                                               
    • A. 

      Rs.5,400

    • B. 

      Rs.6,700

    • C. 

      Rs.8,600

    • D. 

      Rs.5,000

  • 17. 
    A firm dealing in cloth has 15000 meters of cloth on April 1, 2005 valued at Rs.1,50,000 according to LIFO. The firm purchased 20000 meters @ Rs.12 per meter during the year ending 31st March, 2006 and sold 30000 meters @ Rs.25 per meter during the same period. As per LIFO, the closing stock will be valued at:
    • A. 

      Rs.60,000

    • B. 

      Rs. 1,25,000

    • C. 

      Rs.50,000

    • D. 

      None of the above.

  • 18. 
    "Inventories should be outofgodown in the sequence in which they arrive" is based on
    • A. 

      HIFO

    • B. 

      LIFO

    • C. 

      FIFO

    • D. 

      Weighted average

  • 19. 
    A minimum quantity of stock always held as precaution against out of stock situation is called  ________________.         
    • A. 

      Zero stock

    • B. 

      Risk stock

    • C. 

      Base stock

    • D. 

      None of the above

  • 20. 
    M/s Delhi Stationers purchase goods from the manufacturers, do packaging and labelling and sell to their customers. At the year-end they had 1,000 pieces of toilet soaps in hand, purchase price of which is Rs.3.25 per piece. These are yet not packed and labelled. The packaging cost per unit is Re. 0.35 per piece and selling price is Rs.4.25 per piece. The historical cost and selling price of the closing stock will be
    • A. 

      Rs. 3,250 and Rs.3,900 respectively.

    • B. 

      Rs. 3,600 and Rs. 4,250 respectively.

    • C. 

      Rs. 3,250 and Rs. 4,250 respectively.

    • D. 

      Rs. 3,600 and Rs.3,900 respectively.

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