Accounting Quiz or Test Your Accounting Knowledge On Accounting For Stocks

July 31st, 2010 Comments off
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Refresh or test your accounting knowledge on stocks or inventory:


1.0    Describe the accounting treatment of free samples received from suppliers and “sale or return” goods held by customers 

2.0    Define “net realizable value” 

3.0    What is the basic rule regulating the value at which stocks should be stated in the balance sheet

4.0    Explain how the separate valuation principle is relevant in stock valuation 

5.0    What is the double entry in respect of closing stock?

 6.0    What element of expenditure are included in the “cost” of work in progress? 

7.0    Explain how the following three pricing techniques work: 

(a)    FIFO

(b)   LIFO

(c)    Average cost

8.0    Which of the above three pricing techniques is likely to produce a profit figure similar to that obtained under replacement costing?

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