I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

 

131 

 

1 

Only at the end of an accounting period. 

2 

B 

DEBIT: 

Inventory in hand (statement of financial position) 

 

 

CREDIT: 

Closing inventory (statement of profit or loss) 

 

3 

A card is kept for every item of inventory. It shows receipts and issues, with a running total. A few 

inventory items are counted each day to test that the cards are correct. 

4 

A 

NRV is selling price ($8) less further costs to sale ($1), ie $7. 

5 

Mainly because this would result in the business taking a profit before the goods have been sold. 

6 

D 

Only FIFO and AVCO are allowed. 

7 

D Purchase 

price 

plus import duties (and other taxes) plus transport costs less trade discount. 

8 

See Section 5.4.3. 

9 

 

Increase in costs or a fall in selling price 

 

 

Physical deterioration of inventory 

 

 Obsolescence 

 

 Marketing 

strategy 

 

 

Errors in production or purchasing 

 

 

 

 

 

 

Now try ... 

 

Attempt the questions below from the Practice Question Bank 

 

Qs 29 – 33 

 

 

 

 

 

 

 

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