B.COM AFM-1 (Inventory Valuation) MCQ's




Question 1 :
The concept applicable for stock valuation is

  1. Consistency
  2. Realisation
  3. Conservatism
  4. Cost
  

Question 2 :
In _____ method, stock is valued at oldest rate.

  1. FIFO
  2. LIFO
  3. Weighted Average
  4. None of the above
  

Question 3 :
_____ method is applied when the lots of goods are not identifiable.

  1. FIFO
  2. Weighted Average
  3. LIFO
  4. None of the above
  

Question 4 :
Carriage on purchases is

  1. Added to the cost of inventory
  2. Deducted from the cost of inventory
  3. Multiplied by the cost of inventory
  4. None of the above
  

Question 5 :
Weighted Average Method is suitable when the lots of inventory are not identifiable.

  1. TRUE
  2. FALSE
  

Question 6 :
In _____ method, stock is over valued when the prices are rising.

  1. Weighted Average
  2. All of the above
  3. LIFO
  4. FIFO
  

Question 7 :
When closing stock is overvalued

  1. Profit is overstated
  2. Profit is understated
  3. No effect on profit
  4. None of the above
  

Question 8 :
Under _____ method balance sheet does not show stock at current price.

  1. Physical
  2. Periodic
  3. Perpetual
  4. None of the above
  

Question 9 :
The system in which each and every item in the warehouse is physically verified is

  1. Perpetual Inventory system
  2. Physical Inventory system
  3. Retail Inventory system
  4. None of the above
  

Question 10 :
When closing stock is undervalued

  1. Profit is understated
  2. Profit is overstated
  3. No effect on profit
  4. None of the above
  

Question 11 :
Under this method it is assumed that goods sold are the units that were purchased last

  1. LIFO
  2. FIFO
  3. Weighted Average
  4. None of the above
  

Question 12 :
Concept applicable for inventory valuation is

  1. Consistency
  2. Realisation
  3. Conservatism
  4. Matching
  

Question 13 :
Inventory of a trading concern include

  1. Raw Material
  2. Finished Goods only
  3. WIP
  4. None of the above
  

Question 14 :
The method reflects latest purchase cost in the closing stock is

  1. FIFO
  2. LIFO
  3. Weighted Average
  4. None of the above
  

Question 15 :
Bin Card shows stock position in the Bin.

  1. TRUE
  2. FALSE
  

Question 16 :
Perpetual inventory system makes available stock at the end of the year only.

  1. TRUE
  2. FALSE
  

Question 17 :
Finished goods are valued at cost or market price whichever is higher.

  1. TRUE
  2. FALSE
  

Question 18 :
In valuation of inventory _____ concept is followed.

  1. Consistency
  2. Realisation
  3. Conservatism
  4. None of the above
  

Question 19 :
_____ method is not recognised by AS 2.

  1. FIFO
  2. Weighted Average
  3. LIFO
  4. All of the above
  

Question 20 :
Under _____ inventory system, stock is valued on the basis of stores ledger.

  1. both (b) - (d)
  2. Periodic
  3. None of the above
  4. Perpetual
  

Question 21 :
_____ method assumes that stock received last is issued first.

  1. All of the above
  2. LIFO
  3. FIFO
  4. Weighted Average
  

Question 22 :
Inventory of a manufacturer includes

  1. Stock of Raw Materials
  2. Stock of WIP
  3. Stock of Finished Goods
  4. All of the above
  

Question 23 :
AS–2 governs inventory valuation.

  1. TRUE
  2. FALSE
  

Question 24 :
Current year’s profit is overstated when

  1. Closing stock is overvalued
  2. Closing stock is undervalued
  3. When opening stock is undervalued
  4. Both (a) and (c)
  

Question 25 :
Under _____ method lots of stock should be identified.

  1. LIFO
  2. Weighted Average
  3. All of the above
  4. FIFO
  

Question 26 :
Under _____ inventory system, stock is valued by physical stock taking.

  1. Perpetual
  2. None of the above
  3. both (a) - (d)
  4. Periodic
  

Question 27 :
Under _____ method stock is valued after every transaction.

  1. LIFO
  2. Weighted Average
  3. FIFO
  4. None of the above
  

Question 28 :
Under this method it is assumed that goods sold are the first units that were purchased

  1. FIFO
  2. LIFO
  3. Weighted Average method
  4. None of the above
  

Question 29 :
Under periodic Inventory system, inventory is valued

  1. Periodically
  2. Yearly
  3. Continuously
  4. None of the above
  

Question 30 :
Inventory valuation affects the income statement.

  1. TRUE
  2. FALSE
  
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