l/(J ' ·1 I

amount h not :isu :rc..,wuua ..... , .. .. . . - 'l/(J '

'l' t ~,

- MUI.Tf Pll CHOICE QUESTIONS -

SET I

1. The irn entary of finished goods is valued ar-~

(a) Cost or market pncc whichever is lower

( b) Cost or mark cl rrice whichever is higher

~ Cost or Net Realizable Value whichever is lower.

i'J') Cosl or Current Replacement price whichever is lower.

2. ,.\s per AS-2. the historical cost of inventories should normally be determined by tJsi

(a) F1FO and LIFO Method

ng".

th) LIFO and Weighted Average Cost Method

@ FfFO and ~eighted Average Cost Method

{a) FIFO and Simple Average Cost Method

J. As per AS-2, the historical cost of manufactured inventories should be arrived at on the b .

~-

~

@ Absorption costing (b) Marginal costing

(c) Standard costing (d) Estimated costing

4. A<. per AS-2, the historical cost may be compared with Net Realizable Value by

(a) Item by Item method only

(b) Group of Items Method only

J£l. Aggregate of all Items Method only

<fg} Item by Item Method or Group of Items Method

S. Damaged inventory is valued at \

(a) Cost or market price whichever is lower

(b) Cost or market price whichever is higher

(c) Cost or Net Realizable Value whichever is lower.

( d) Cost or Current Replacement price whichever is lower.

{(iJ) at net realizable value

6. Where cost of by-products can not be separately determined, inventory of by product

should be valued at-

s

(a) Cost or market price whichever is lower

(b) Cost or market price whichever is higher

(c) Cost or Net Realizable Value whichever is lower.

( d) Cost or Current Replacement price whichever is lo

tt:11 al ' wer.

et' at net re 1zable value

7. When FIFO method is followed during period of . . .

(. ) ' nsmg pnces-

~ reported profits fall due to higher cost of goods

~ :eported ~rofits rise due to lower cost of goods sold

(c) inventory is valued at old cost in the bal h

'd'\ f h ance s eet

\, , none o t ese

8. Which of the following is True?

(a) The value of ending inventory und . 1

(b,) U er s1mp e a verag . . . .

1 sually profit or loss will not a · e pnce method is realistic

average price method nse out of pricing the issues on the basis of simple

·1

Valuattnn 11/ /11 ~, tttorv 14..39

.1 he value of stock is &hown on the assets side f th b _ @. l • . ·k l • 0 c alance-~hcet a<, t Lxed a.\~cts

J openrng sloe p us purchases minus cost of goods , ld . I . IJ.' · so ts l 1c value of closmg stock.

Vndcr inflationary conditions, which of the method -11 h . . 9, " · , s Wt s ow highest value of closing ~1ock l @ FIFO (b) LIFO (c) Weight~d Average . . (d) None of the above U d r inflationary cond1t1ons which of th hod · • 10. n e ' e met s will show lowest value of closmg ,tock? ~~) FIFO @) LIFO (c) Weighted Average (d) All of the bo . d' . a ve

11. Under infiauonary con it,ons, which of the methods wi ll show greatest value of cost of .$-9ods sold?

f (11)1

FJFO (b) J JFO \ {~) Weighted Average (dl None of the nbove

12, Under inflat,on.uy condll ion1, \t. lu"- h ol the mi.:th1xh v.1l1 !,hr,w l(n.\ cst value of cost of ~ ds sold'/

~ V FlrO n, , I.I HJ (c) Wcight e<l A' l' t •' )1 C (d) J\ ll nl the ahovc

13, ro~t of Grkxh ,old , ... r qu.1I lo: (n) Chh 11\~ Sh)I. \.. ➔ l'\Jh h.1,n Opc11111g Stod (h) Chhm£ Shx k • Op<'lllll)' \1 ,-.. k - Purt h 1\C, ~ s.,k, ctt"'"}' s,t-..J, ~ J Put\ .: htt'> l' ' n ,,-. 11H1 \ Uk~ f' ( )pc1tm ►• <;tod:

U. (h,;'ling q o,f " "t.>qu.1\ tn ,{a)' OJ)t'nt1\ l! Sil, k • ( n,t l,f Ono<l!i ~. ,hl PurctL1 cs (h\ Cth t t\ f Goc:~h ~11hl t )pt ntnt Shw.:\ l•ur h.1M:1 © 01-.enin:t Sh~ ~ + ,~llh h.1,.e, l H) l ol n,~-1, S,Jtd td) C\.,,t l)l (~l'(,h ~H,lll -f Pt1 reh.1~ ( ' fl'l'mn • !'ilr,11\; l

15. lf l1penmg , tc,d,. "un,kN.llt•,1. (G)) the.> 1'f1.)(ll \\ 1!111h ft'.hl'

'rc)' the prnfit ,, ,lt Ot1l, h.,nt-e 16. lf operung :.lt'-.'h. 1, o, ~hl.1tl',l - -

(u) the p1"1lit ,, 111 tn1.-' rc.'.i.,l"

lC) the pwht ,, ill rot 1.,h.1nge 17. If cto,mg ,wd,. 1' unJeN itc.'d

(bJ lhe proiil v. ,11 UCo..l~ t.s.t {di None N dk:-M;

h I lh.: profit Wlll &"°JtuSC

td) :\un? ul lN::-.ic

(a) the prntit \\ 111 indea,e anJ \;ll1rent .,~:,eh \\ tU t.l~..:-rel~e (b) 1he pRlfit ,, ill d~·te!hC nnd Cttrr~nt .\,'.!th\\ 1ll 10de..1-:>c tc-) Both 11\e profit(\.. l ltlTt.>H( .t ... ,<.'t, \\ ill in" rc.1,t'. @ Both the prt)flt & "urren1 ,1,,eh \\: ill Jc"'re.1~

18. lf closing stock 1~ o, eNJteJ -(n) the profit \\ill mcre~he and current n,>;c'h "ill Jcne:he ~ the profit\\ ill decre:ic;e nnd current =i,,~h ~ 111 mcrease (.§}) Both the profit & currem a~"e1, "11\ in~re.~ ld) Both the profit & current as~ct:s \\tll da:rea~

19. In the pre\1ous )e:ir, clo, ing. c;tock \Hts valu_ed more by Rs. 10.000. As a result (n\ Pre, 1ous }esr's profit b o,er ... tltetl ::md current year' s profit is also O\-Cf\lated lb) Prt-, tOO\ )ear's pn,fit is unde~t:ited and current year' i profit is oversuted ~t_: Prcviou, yc.,r's profit l') understated ur.d c.urrcnt ~ear"~ profit is nlso undeN.1ted f, t~J r.~,ioor )C:.U-'s profit 1~ overstated and current }ear·~ profit ,~ und~rstaied

. fiJr Common Proficiency Test (CPT) I fAccounf llHf ' · • - --14.40 Fundamn~a ~\· '~ . ~- · --' . - · - · - ~ --- - . , ·k W' s undervalued by Rs. 10,000. As a result · . r ·losing sto,, a . f' . , l

2.o I the previous yeu , ~ . - . . t d and current year· s pro ll is a so overstated . n , ,rot ttl~ 0 vet sta e fi • Previous yesr s 1 ~· .·

1 . , t ~d and current year 's pro ·1t JS overstat.ed . ~ roftl JS unt ersta t::

- • I

.

Previous year s p . d. t ted ar.1d current year's prof t t is a so undcrstat 1 , profit 1s un ers a • . . · ec Previous year s .· 1, t ~d and current year' s profit is understated . . .•- profit ts overs .1 c . ' d .

(d) Previous yent s . ., .1

then the journal entry at the en of the period w·i --A . purchased urc in ll ans1 . I I he 21. If the govus • . Dr, (a) Goods-1n-tran~1t ~/c

To suppher s Ale

•

(b) (joods-i1Hninsit Ale To Purchases Ale

(c) Good-in-transit Ale To Trading Ale

@ (b) or(c)

Dr.

Dr.

SET II · I R l 00 000 Purchases Rs 4 00 000 Sales Rs. 3,00,000. Selling Price 1. Opemng nventory s. , , , · ' ' '

_ 33!% on cost. The estimated cost of closing inventory is: (a) ls. 2,00,000 (b) Rs. 3,00,000 {(C) Rs. 2,75,000 (d) None of these 2. '6;,ening Inventory Rs. l ,00,000, Purchases Rs. 4,00,000, Sales Rs. 3,00,000. Selling Price - 33!% on cost. Goods costing Rs. 25,000 destroyed by fire. The estimated cost of 3 closing inventory is: ~ Rs. 1,75,000 (b) Rs. 2,75,000 ~ Rs. 2,50,000 ( d) Rs. 2,00,000 3. Opening Inventory Rs. 1,00,000, Purchases, Rs. 4,00,000, Sales Rs. 3,00,000. Selling Price- 33i% on cost. Goods costing Rs. 25,000 destroyed by fire. Market value of closing : ventory is 20% less than the cost. In the financial statements closing inventory will appear (a) Rs. 1,40,000 (b) Rs. 2,20,000 (@ Rs. 2,00,000 (d) Rs. 1,60,000 4. CAS Ltd. recorded the following information as on March 31, 2007:

Rs. Stock as on April O 1,2006 1,60,000 Purchases Sales 3,20,000 It is notic.,ed that goods worth Rs 60 000 4,00,000 insuran · ' were destroyed d t f ' · ce company accepted a claim of Rs. 40,000_ ue O ire. Against this, the

The company seJis goods at cost plus 33!'½ Th . 3 ° · e value of cl · · mto account the above transactio . osmg mventory, after taking {a) Rs. 20,000 n is,

(c) Rs. 2,00,000 ~ Rs. 60,000 1

5. Opening Inventory Rs. l 00 000 p ® Rs. 1,20,000 I . ' , , urchases Rs. 4,00 000 S - 33-£½ ' ' ales, Rs 3 00 00 • . 3 ° on cost. Value of closing inv · ' , 0, Selhrtg pnce estim t d entory as per phy · a e cost of missing inventory is: s1cal verification Rs. 2,00,000. The

~ - ·--- Val · · , _ ..,. - --~- ~ - -- --" _ -·~~on of Inventory 14.41 ,,. - - ---

, (b) Rs l 00 000 Nil (X)O {d) . ' '

i,t) ~~s-75, CAS Ltd. revealed the followin . None ~f these .'.) . 1, s of g information·

1! '} b()(ll\ •

~ - ~~ & ~· r1,ci po ·nventoiy 12 00 000

optfliflg~ doring the year 2006-2007 68:oo:ooo porch as . the year 2006-2007 96 00 000

581e.~ duno

3gl 2007, the value ofinventory as per p' hy' • 1 ,Aarch ' fi a] Sica stock-taking was Rs 6 50 000 on JV• y' s gross pro It on s es has remained cons tan , 25 · ' ' ·

'1'1,e cof11Pao . cts that some inventory might h be _tat %. The management of the 11 y suspe ave · en pilfered by l Wh ofl'lP911 , ed. cost of missing inventory? a new emp oyee. at c suJ1lat i,,ne;s, 1,50,000 Ch) Rb. 50,000 @ Rs, 2,00,000 . . , . ( d) R q, 3,00,000

(c) 'd r Ll1e following tnformo11on r,emunint to CAS Ltd. on M, h 31 200·7· ( oOSI e arc , .

1, , particulars . Rs. inginwntmy iO,rx,.cxx.,

o~;lll'csdurms the yrM '2CJ)6 2007 ()() ,{X).(XK}

~~c,durin~ the yl.':lf ~CK)(> 200/ . IOO,(Kl,()(X) pa ph}llJC'.~ 11, , c.:ntn1y t.,~, fl rin Mt1rdt J 1. ~t~}7 thn :lih Hlfrn,,crit,,ry Wt.1\ Rei 41,R(J,(XX}.

A~~' ridil 011 , .. ,It·, h., , rl' 11 '•111wcl 1. "u,,.011 .,t 15'4 l ht rrun.iycr~ nt ,,f the firm <;u4;, pects ~nl ,()rne in, t•nhH) nu~ht II.I\ (' tl\·,n l,,~cn •1\1. •1) h) .1 nc~ crnplh) ct The c 11Jmatcd co<;t of ,111,,111~ ,n, cnt,'f)' on thr 1. h>,~ nl •hr n,1.H\l tal ) c.u un.J the c.<Hl ,,t g,,od ' t.old dunng the

l\'' rxx li' t•l y ,m.' i:t R~. S,30.l~'Kl. lh . J'\,( )( ),fl(X_l (b) k" I 20,fx't>. k~ 78,20.()(.i> td R,. 3.50.CXXl. R,. HXlJK>.~OJ {(JJ I<,. 3.20.CO'J, R,. 7~.~>J1!.J

l Of"'Rlfl~ stod . R, t.<XJ.C.K.XJ. t hmng M~ J, 1< ~ ~. 15.t•~1. Purtha.\C" .R, 4.'1,.(XX)~ Selling pn,<t = 15'1 t'O ~.,k, l1tt' ,.al,· , ,l ft -(:ii R'I. 1,s1.2.,o (lH k .. 2.70 r;.x, @ ~. J,tXllXXl fdJ R, 1,{'1 175

9. con,,derthe tvllO\\ inr J .1 IJ 1-x-r1.11ning (u l ,\~ Led fur lhc munth Oi March 1(fj1: ,b at \l,ml, ()I, 2007 AimMarch JJ, 2007

Stock R, ).60,CXXl R~ um.<XXl The romJ)JllY nuJc pun. h.bt'.:. :imouniing R, 6,60,CXXl on c. edit Dunng the month of \faith ~007, the l. ompJn~ p_1,t.J :i ,um Li t R\ 7,W.(XX) to the ,\upptiu~ The goods are ~old a1 15't :tbO\e rhe C(ht Inc ~.tk\ for tht munch of M,ir\,h ~007 \\ere. (3) Rs. 8,25.lXXl I b j R \ lll 11 00 (c) Rs. l ,80.<XX.) ( d l R, 6, ~. tl}.xl

IQ, C'01ts1dl"J' the follo\\ mg dat!l penainmg to ~1 C \S Lld for tht month of March 2(X)7: • Opening ~locl R~. -t4,WJ

Closing &lock R,. 50.000 Pun-hases less retu~ Rs. ~ .20,000 ~s profit margin (on sJles) 20% ThtsaJrsof the compan} dunng the month are la1 Rs. 2,62,500 (h) R~. 2.71.200

Ii ~ lls. 2,67.5()) (d) Rs. 2,56,800 , · Co~,dtr the lollo" ing dau pennining to CAS Ltd. for the month of March 200?:

~nm~ stock Rs 60,CXXl C1~m, stoc-k Rs 80,000 ~hliC> Rs J 1.20.000 ~~ autv. nni Rs 30,COJ ~11n,"'1rd Rs -W.000 Cll:"n:.-~-..,,,'I; .. ~ R, l(1,t:xX1

14.42 F

undamentals o

f Accounting.for Com

mon P

roficiency Test (CP

T) -·-

,~, ,.., _____ .. _______ -

.. \ If the gross profit is 20%

of net sales, the gross sales for the month of M

arch 2 /(aj)

Rs. 13,8.>0,000

(b) R

s. 13,50,000 Oo7 is

~)

Rs. 10,80,000

(d) R

s. 13,37,500

12. Sales R

s. 30,000, Selling price = 33-3 1 %

on cost, Cost of goods availabi e for

Rs. 5,00,000, C

losing Inventory is sale

~ Rs. 2,00,000

(b) R

s. 3,00,000 R

s. 2,75,000 (d)

None of these

13. nsider the follow

ing for CA

S Ltd. for the year 2006-07: 7

Cost of goods available for sale

Rs. 2,00,000

Total sales R

s. 1,60,000 O

pening stock of goods R

s. 40,000 G

ross profit margin

25%

Closing stock of goods for the year 2006-07 w

as ~

Rs. 1,60,000

(b) R

s. J,20,000 ®

J R

s. 80,000 (d)

Rs. 72,000

14. C

ost of goods available for sale Rs. 5,00,000, Selling price =

25% on sales Clo .

' sin

Inventory Rs. 2,75,000. The sales are:

g

Rs. 3,00,000

(d) N

one of these ~

Rs. 2,00,000

(b) R

s. 2,81,250

15. e total cost of goods available for sale w

ith a company during the current year is Rs

12,00,000 and the total sales during the pe1iod are Rs. 13,00,000. If the gross profit m

argi~

of the company is 33

!% on cost, the closing inventory during the current year is

3 ~

Rs. 4,00,000

(b) R

s. 3,00,000 (0

Rs. 2,25,000

(d) R

s. 2,60,000

)6. X

Ltd. purchased 100 units @ R

s. 10 for cash, 200 units @ R

s. 20 subject to 10% trade

discount and 5% cash discount against current dated cheque. The total am

ount of purchases is

-(a)

Rs. 3,600

(c) R

s. 3,420 @3)

Rs. 4,600

(d) R

s. 4,420

17. O

pening Inventory Rs. 1,00,000, Sales R

s. 3,00,000, Selling price -

Closing inventory R

s. 2,75,000. The total amount of purchases is -

fa),_ R

s. 2,00,000 (b)

Rs. 3,00,000 ~

Rs. 4,00,000

(d) R

s. 5,00,000

SET Ill

1. A

pril 01 O

pening stock 50 Units @

Rs. 44 per unit

I 33-

% on cos~

3

April 02

Purchases 100 units@ R

s. 47 per unit /

April 07

Issued 50 units .

The value of inventory at the end of the week U

nder Weighted A

verage Method ts

~

Rs. 4,600 (b)

Rs. 4,550

( c) Rs. 4,700

( d) R

s. 4,400 2. ,,A

pril 01 O

pening stock 50 Units @

Rs. 44 per unit

J A

pril 02 Purchases 100 units@

Rs. 47 per unit

April 07

Issued 50 units

J~e value of inventory at the end of the week under FIFO

method is

fu} R

s. 4,700 (b)

Rs. 4,550 k

) Rs. 4,600

(d) N

one of these

-. 01

opening stock 50 Units@

Rs. 44 per unit

3 . APr~! 02 purchases 100 units @

Rs. 47 per unit

1/ AP~107 Issued 50 units

APrt a}ue of inventory at the end of the week under LIFO

method is

,n,e

V

I 1 ''

Rs, 4,700

(b) R

s. 4,550 ·

(ll) R

s4,600 .

. . d~

Noneofthese

(c)coroPanY, a dealer m cosm

ettcs, records its mventory under first-in first-out m

ethod, so 4, V

m

inimize accum

ulation of outdated stock. The opening stock as on Septem

ber O 1, 2007

/: :~o units at the rate of Rs. 20 per unit. T

he purchases and sales made during the m

onth are:

Purchased 200 units@ R

s. 25 D

ate

05 _0 1-2007 lS-01-2007

Purchased 100 units @ R

s. 22 ()4-0l-2007

Sold 100 ll-O

l-2007 Sold 150

With effect from

Jan 01,2007, the company decided to change the m

ethod of inventory valuation from

the FIFO m

ethod of LIFO m

ethod. The change in the value of inventory

consequent upon the change in the method of valuation is

~

Increase in the value of closing stock by Rs. 250.

~ D

ecrease_ in the value of clo~ing stock by Rs. 250.

(c) Increase m

the value of closmg stock by R

s. 500. (d)

Decrease in the value of closing stock by R

s. 500. 5. C

onsider the following data pertaining to C

AS Ltd. for the m

onth of March 2007

:

/ -

Date

Purchases

Issues Balance

--

-·-·

-

Quantity

Rate Q

uantity Q

uantity Rate

(kg.) (R

s.) (K

g.) (K

g.) (R

s.) --·

··-01-03-2007

500 45.60

02-03-2007 400

48

10-03-2007 600

50

25-03-2007 I

1,000

lf the company uses w

eighted average method for inventory valuation, the value of inventory

as on March 31, 2007 is

-(a)

Rs. 23,800

(b) R

s. 24,000 (c)

Rs. 25,000

(d) R

s. 22,800 6. CA

S Ltd. maintains the inventory records under perpetual system

of inventory. C

onsider the _.,.,follow

ing data pertaining of inventory of CA

S Ltd. held for the m

onth of March 2007

:

Date I

Particulars Q

uantity C

ost per unit (Rs.)

Mar. 1

Opening Inventory

15 800

Mar.4

Purchases 20

900 M

ar. 6 Purchases

10 920

-If the company sold 32 units on M

ach 24, 2007, closing inventory under FIFO m

ethod is (a)

Rs. 10,400

~ R

s. 11,200 (c)

Rs. 11,600 ®

-R

s. 11,900

&..~~

~l

.,;;r,

U . .W

Fim

damm

wls of.-\rc01111ti11g

for Comm

on Proficiency Test (CPT)

~\

,,_,

\

---7.

11,e following arc the details ~upplkd by C

AS Lld. in respell of its raw

mate ..

Month of D

ecember, :007:

riltls rllt 1

-~

--

·T

~,~ --\ 01.12.1007 07.12.1007 10.12.2007 15.12.2007 31.12.2007

Receipts (U

11its)

2,000 (Opening)

1,000

2,000

Price per unit ( Rs.)

10 12

13

On 31.12.2007, a shortage of 100 units w

as found. (i)

Find the value of closing stock using LIFO principle.

""' (a)

Rs. 3,800

. (b)

Rs. 4,800

--

....... _

11,:

0 i.es ((J,I' -

Its)

2,so0

2,20()

(c) R

s. 4,000 (d)

Rs. 2,000 (ii)

Using the data given in problem

, the value of issues in the mon tb of D

ecember 200J

using LIFO principle.

(a) R

s. 70,000 (b)

Rs. 56,000

(c) R

s. 40,000 (d)

Rs. 1,30,000 (iii)

Using the data given in problem

, the value of closing stock using FIFO principle.

i (a)

Rs. 3,200 (b)

Rs. 3,000 (c)

Rs. 2,600

(d) Rs. 4,000

(iv) U

sing the date given in problem the value of issues in the m

onth of Decem

ber 2007 ,

using FIFO m

ethod.

' (a)

Rs. 55,400

(b) Rs. 71,000

(c) R

s. 39,000 (d)

Rs. 42,600

~

1'

(v) U

sing the data given in problem, the value of closing stock using sim

ple average ( principle.

(a) Rs. 1,900

(b) Rs. 1,750

(c) Rs. 2,000

(d) Rs. 2,600

(vi) U

sing the data given in problem, the value of issues in the m

onth of Decem

ber 2007 using sim

ple average method.

' (a) Rs. 30,770

(b) Rs. 43,350

(c) Rs. 39,500

(d) Rs. 56,250

8. H

industan Ltd. has furnished the following details:

Date

. Particulars

Units

Rate (Rs.) 01.03.2007

Opening Stock

100 3.50

05.03.2007 Purchased

150 3.00

12.03.2007 Purchased

300 3.20

08.03.2007 Issued

200 -

18.03.2007 Issued

250 -

-(i)

What is the value of closing stock using FIFO

method:

✓ (a)

Rs. 340 (b)

Rs. 320 (c)

Rs. 300 (d)

Rs. 360. (ii)

Using the inform

ation given in the problem, the value of issues using FIFO

method:

.I . (a)

Rs. 1,400

(b) Rs. 1,160

(c) R

s. 1,210 (d)

Rs. 1,440

) Lh

ing the rn

lorrna1Ion given in prob

lem, lhc vJlu~ ol clm

,m;_,; ~,lu

.1 t.'1 I,u

Lll·l >

(111

1ncthod: .,

(u) R

s. 345 (b)

Rs. 450

(c) Rs. 3~0

. .

. (d)

Rs. 335

. ) Usin"' the m

formatton given m

problem, the value of issues using U

FO m

ethod: (IV

tP

(a) R

s. 1,225 (b)

Rs. 1,031

,, (c)

Rs. 1,240

(d) R

s. 1,151 (v)

Using the inform

ation given in problem the value of closing stock as per w

eighted ,. average m

ethod: /

(a) R

s. 320 (b)

Rs. 351

(c) R

s. 300 (d)

Rs. 451

(vi) U

sing the information given in problem

, the value of issues using weighted average

..,. m

ethod: (a)

Rs. 1201

(b) R

s. 1160 (c)

Rs. 1240

(d) R

s. 1440

9 B

harat Indian Oil is a bulk distributor of petrol. A

periodic inventory of petrol on hand is

· takeJl when the books are closed at the end of each m

onth. The following sum

mary of

~rrnation is available for the m

onth:

'"\.,~ ... ,_

Sal'es R

s. 9,45.000 G

eneral administration co~t R

s. 25,000 O

pening Stock: 1.00,000 litres @ R

s. 3 per Jj1re Rs. 3,00.000

Purchases (including freight inwurd):

June l 2,00,000 litres @

Rs. 2.KS per litre

June 30 I ,00,000 litres {!J) R

,. 3.03 per litre )llne 30

Closing stock \ ,30,000 litre~

(i) The vuluc of inventory on June: 30 u,ing H

l·O m

ctho<l of inventory co~ting is: (u)

Rs. 3.K8,500

(hJ ~

,. 4.1 k,5(X)

(c) R

s. 2,58.000

(LI) R

i,. 3.60.500 (ii)

The 1m1ount o

f cost of goods ~old for June u~in

g FlH

) Method i,:

(a) R

s. 7 .84, 500 Ch)

R,

6,k5,()(X)

(c) R

s. 3.88.500 (d

.l Jh

. 7,58.COO

(iii)

The Profit or lo,s for June u,.m

g flFO

mt:lhod of im

cntory co,tmg •~:

(a) Rs. 1,60,000

lhl

R,. 1,1

5.5(.l(J (c)

Rs. 1,25.0(X

) (d)

R,. I J5,5L(J

(iv) T

he value of inventory on June JO u,rng \\ c1ghtcd average meth<X

l of inventory is: '

(a) R

s. 3.75,000 (b)

R'I

3,90,000 (c)

Rs. 2.80,000

(d) R

,. ➔, I O.<XX>

(v) The am

ount of cost of gcxx!-; ~old for June u,mg w

eighted a, ernge method is.

(a) R

s. 8,15.000 (b

l R~. 7,52,CxX

) (c)

Rs. 7,83.000

(d> R

~. 6,79,U()J

(vi) T

he Profit or los~ for June using Weighted A

\emge :\!erhod of inventory is:

(a) R

s. 1,20,(X)() tb

l R

,. :2, 15,000 (c)

Rs. l,37,000

(d) R~. l ,29,000

(vii) The value of in\'entory on June JO using LIFO

md

ho

d of invenw

ry is: (a)

Rs, 3,93.000

(b) R~. 3,69.000

(c) R

s. 2,97,000 (ct)

R~. -l.I8.000 (viii)

The amount of cost of goods sold for June using L

IFO M

ethod is: (a)

Rs. 7,80,000

(b)

Rs. 6,75,000

(c) R

s. 8,15,000 (d

) R

s. 7.95.000 (ix)

The Profit or loss for June using LIFO

method of inventory M

ethod is: (a)

Rs. 1,95

,500 (b)

Rs. 1.65,000

(c) R

s. 1.40.000 (d)

Rs. 1,95.000

j

14:4'_Fundmne1:_tals of 1ccountin~J:1_r Com

mon ,:roflc'.ency Test ( CPT)

y SET IV I'

;§e cost of invent.ory ru; per physicnl verification _as on 24th ~ar~h, 2007 w

as Rs. 4,00,

ween 24th M

arch and JI st M

arch, the followm

g transacllons took place: ~

-

( ) Pu

ha " ,·· R'-,, 00 000 out of w

hich 20% goods w

ere retumed

a re

.,c.: s , . -1

,

(b) Sale" of Rs. 2.00.000our of w

hich 20% goods w

ere returned. Goods are sold ata Prori

of 25% on cost.

t

The cost of inventory ns per books is:

(at' 11 Rs. 4,00,000 (b)

Rs. 3,68,000

@

Rs. 4,32,000 .

. (?)

None of these

,l: n1 e m

st of inventory as per physical venfication _as on 24th ~arch, 2007 was Rs. 4,00,00o

v Betw

een 24th March and 31st M

arch, the followm

g transact10ns took place: ·

SaJes Rs. 2,21 ,600 which includes:

(a) Sales of R

s. 10,800 at 20% m

ore than the normal selling price

{b)

Sales of Rs. l 0,800 at 20% less than the norm

al selling price

Note: The nonnal selling price is 25%

on cost. The cost of inventory as per book is:

~

Rs. 2,33,800 (b)

Rs. 2,22, 720

~

Rs. 2,23,200

( d) N

one of these

3. The cost of inventory as per physical verification as on 24th M

arch, 2007 was R

s. 4,00,00()

/ G

oods are sold at a profit of 25 % on cost.

·

On 21st M

arch, goods of the sale value of Rs. 1,00,000 w

ere sent on sale or return basis to

a customer, the period of approval being tw

o weeks.

!k_e cost of inventory as per books is: ~ Rs. 4,80,000

(b) Rs. 4, 16,000

(c) R

s. 4,28,800 (d)

None of these


arch, 2007 was R

s. 4,00,000.

Goods are sold at a profit of 25%

on cost.

On 21st M

arch, goods on the sale value of Rs. 1,00,000 were sent on sale on return basis to

a customer, the period of approval being tw

o weeks. H

e returned 20% of the goods on 31st

March.

~e cost of inventory as per books is:

~

Rs. 4,80,000

(b) R

s. 4,1 6,000

(c) Rs. 4,28,000

(d) N

one of these


arch, 2007 was R

s. 4,00,000

Goods are sold at a profit of 25%

on cost. ·

On 21st M

arch, go?ds on the sale value of Rs. 1,00,000 w

ere sent on sale on return basis to

a customer, the penod of approval being tw

o weeks. H

e approved 80% of the goods on 31 st

March.

The cost of inventory as per books is:

( a) R

s. 4,80,000 ~,;>bl) R

s. 4 , 16 ,000

(c) Rs. 4,28,000

( N

f h

6 .

one o t ese

. The cost of inventory as per physical verification as on 24th M

arc

Goods are sold at a profit of 2S%

on cost. · h, 2007 was R

s. 4,00,000.

On 21st M

arch, goods on the sale value of Rs 10000

I basis to a custom

er, the period of approval b . · '

' O

were sent on sale on sale return

emg tw

o weeks

.

and approv~d the remaining on 31st M

arch. · H

e retmned 20%

of the goods

The cost of in ventory as per books is: 1

(a) R

s. 4,80,000 ,1b'

1

(c) R

s. 4,28,000 ~

Rs. 4,l6,000 /

(d) N

one of these / I I I l 1; I,

'

y t

- --- Valuation of In ventory 14.47

'fh' c\1:-I of invcnt~ry as per p~ysical verification as on 24th March, 2007 was Rs. 4,00,000. 1, -•L• ·ire sold at a profi t of ... 5% on cost ( j()OU-' • '

I ·t March goods on the sa e value of R 1 00 000 · on 2 s ' _ . s. , , were sent on sale on return basis to n custorner, the penod of _a~prc val bemg two weeks. He returned 20% of the goods and ' al 80% of the remammg on 31st Ma h Th · · · approv re • e cost of mventory as per books 1s: ~ Rs. 4,80,000 (b) Rs. 4, 16,000 (S9. Rs. 4? 8,000 . (d) None of these

8 The cost of inventory as per physical verification as on 24th March, 2007 was Rs. 4,00,000.

· Goods are sold at a profit of 25% on cost. on 27th March, goods of the sale value of Rs. 1,00,000 were sent on sale or return basis to a customer, the period of approval being two weeks. ~ cost of inventory as per books is: ~ Rs. 4,00,000 (b) Rs. 3,36,000 (c) Rs. 4,48,000 (d) None of these

9. The cost of inventory as per physical veri fication as on 24th March, 2007 was Rs. 4,00,000. Goods are sold at a profit of 25% on cost. On 27th March, goods on lhe sale value of R~. 1,00,000 were sent on ~ale on return basis to a customer, theperiodof approvtll being two wc('k,. I (cretumcd20%ofthe goods on 31st March. The cost of inventory as pl!r books is: @ Rs. 4,00,000 (b) th . 3,36.000 (c) Rs. 4,48,000 (d) None of thci,c

10. The cost of inventory as per phy:-icnl veri Ii cation a, on 24th March. 2007 was Rs. 4,00,000. Goods are sold at n pr0ti l of 25% on cn, t. On 27th March, goo<ls on the !\ale value of I~ . I ,(X).(XX) were ~ nt on li~le on return basis to a customer, the period ofapproval hci ng t\\ l ) \\-ed .,. He approved RO'* of the good<i on 31 ~t March. The cost of inventory as per honk~ i,: (a) Rs. -l .00,000 ((b) R, . 1,36.000 (c) Rs. 4,48,000 (d) None Clf thc~c

11. The cost of il\\cntof) a, per phy,ic~\I \\! rifil,tl1un ,1, llO 24th ~1arch, 2007 was Rs. 4,00,000. Goods are sold at a proti1 ol 25c t on co,t On 27th March, goods on th~ S,\IC vnh1c nl R , . 1.U0.000 \\ ere ,cnl on sale on sale return basis to a customer, the period of apprL)\ .1I being mo \I,, ccb He returned 20%: of the goods on 31st March . The cost of inventory as per books h : (a) Rs. -t ,00,000 tbl Rs. 3,36,000 (c) Rs. -l ,➔ 8,000 (<l) None of lhe~e

12. The cost of im entory as per phy~ical verification ns on 24th March, 2007 was Rs. 4,00,000. Goods arc sold at a profi1 of 2y·~ on co,1. On 27th March. goods on the sJle v,1 l ue of Rs. 1.00,000 were sent on sale on return basis to a customer, the penod of nppro,al berng mo \\eeks. He returned '.:!0% of the goods and approval 80'« of the remaining: on 3 lsr Murch. The cost of inventory as per books is: (a) Rs. 4,00,000 (b) Rs. 3.36,000

{(C)') Rs. 4,48,000 (d) None of these 13. 'The cost of inventory as per physical veri ficarion as on 24th March, 2007 was Rs. 4,00,000.

Goods are sold at a profit of 25"b on cost. On 27th March, goods on the sale \ alue of Rs. 1,00,000 were sent on sale on return basis to a cu,;tomer, the period of approval being two weeks. But it was well known that he had pledged 80'k of the goods\\ ith me Bank on 31st March. The cost of inventory as per hooks is: ht) Rs. 4,00,(XX) tr) ~ . 4.4-8,W)

~ Rs. 3.36.000 'tc() None of these

14.48 Fu11dame11tals of Acrow,ringfor Common Proficiency Test (CPT) - ~ -- ----- ... .. - ~--........

14. ·n1e cost of inventory as per physical vetification as on 24th March, 2007 Was ~s. 4

'

GO<'ds ar~ sokl al u profit of 25% on cost. . . •~.~ l

On 2~rd March. goods costing Rs. 2,00,000 were received for sale on consignfllerit ·

80% of these goods had been sold on 31st March. hasi,

On 23rd March, goods of the sale value of Rs. 2,00,000 were sent on consigntnerit b ·

80% of thes~ goods has been sold on 31st March. %,

The cosl of inventory as per books is: (n) Rs. 4,00,000 (b) Rs. 2,40,000

@) Rs. 2,32,000 ( d) Rs. 2, 72,000

15. The cost of inventory as per physical verification as on 24th March, 2007 was Rs. 4,())

Goods are sold at a profit of 25% on cost. •~.

On 27th March, goods costing Rs. 2,00,000 were received for sale on consignment bas·

80% of these goods had been sold on 31st March. IS.

On 27th March, goods of the sale value of Rs. 2,00,000 were sent on consignment bas·

80% of these goods has been sold on 31st March. 18

·

The cost of inventory as per books is: ~ Rs. 4,00,000 (b) Rs. 3,36,000

~ Rs. 4,48,000 ( d) None of th~se

16. On April 07, 2007, i.e., a week after the end of the accountmg year_ 2006-07, a cornPany

undertook physical stock verification. The value of stock as per phys1cal stock verification

was found to be Rs. 70,000 The following details pertaining to the period April 01, 2007 to April 07, 2007 are given:

I. Goods costing Rs. 10,000 were sold during the week.

II. Goods received from consignor am_ounting to Rs. 8,000 included in the value of stock,

III. Goods earlier purchased but returned during the period amounted to Rs. 2,000.

IV. Goods earlier purchased and accounted but not received Rs. 12,000

After considering the above, the value of stock held as on March 31, 2007 was

5!l Rs. 54,000 (b) Rs. 38,000

®' Rs. 86,000 (d) Rs. 1,02,000

17. X who was closing his books on 31.03.2007 failed to take the actual stock which he did on

9th April, when it was ascertained by him to be worth Rs. 50,000

It was found that sales are entered in the Sales Day Book on the same day of despatch and

the returns inward in the return book as and when the goods are received back. Purchases are

entered in the Purchase Day Book once the invoices are received. Observations -

(i) Sales between 31st March and 9th April as per Sales Book are Rs. 1,720. Rate of

gross profit is 33I% on cost. 3

(ii) Purchases during the same period as per Purchases Book are Rs. 120.

(iii) Out of above purchases, goods amounting to Rs. 50 were not received until after the

stock was taken.

(iv) Goods invoiced during the month of March, but goods received only on 4th April,

amounted to Rs. 100. The value of physical stock on 31st March is

(a) Rs. 51,320 © Rs. 51 ,120

(c) Rs. 31,190 (d) Rs. 48,530

18. Physical verification of stock was done on 23rd June the value of stock was Rs. 5,00,000

following transactions took place between 23rd June and 30th June_

I. Out of goods sent on consignment, goods costing Rs. 24,000 were unsold.

2. Purchases of Rs. 40,000 were made, out of which goods worth Rs. 16,000 were

delivered on 5th July.

Valuation of inventory 14.49

3. Sales were Rs. 1,36,000 which include goods worth Rs. 32,000 sent on approval. Half of these goods were returned before 30th June, but no intimation is available regarding the remaining goods. Goods are sold at cost plus 25%. However, goods costing Rs. 24,000 had been sold for Rs. 12,000.

The value of stock as per books on 30th June is _ (a) Rs. 5,00,000 (b) Rs. 5,64,000 (c) Rs. 4,56,000 @) Rs. 4,66,400

sET V

The cost of stock as per physical verification as on 24th March amounted to Rs. 2,00,000. 1. Purchases as per Purchases Book after stock taking till 31st March amounted to Rs. 2,00,000 and included the following: (i) Rs. 10,000 for goods received till 23rd March. (ii) Rs. 20,000 for goods received on 1st Apri l. Sales as per Sales Book after stock taking, till 31st March amounted to Rs. 2,00,000 and included the following: (i) Rs. 10,000 for goods delivered ti ll 23rd Murch. (ii) Rs. 20,000 for goods delivered on I st April. Goods are sold by the trader nl u pro lit of 25% on Cost. The value of stock as per books is -(a) Rs. 2,40,000 {{b) Rs. 2,38,000 (c) Rs. 2,36.000 (d) R~. 2.34,000

2. Cost of stock as per books as on 24th March is Rs. 2,38.000 Purchases as per Purchases Book after stock taking till 31st March amounted to Rs. 2,00,000 and included the fo llowing: (i) Rs. 10,000 for goods received till 23rd March. (ii) Rs. 20,000 for goods received on I ,t April. Sales as per Sales Book after stock tnk1ng, 11II 31 ~t March amounted to R~. 2,00,000 and included the following: (i) Rs. 10,000 for goods delivered till 23rd M:trch. (ii) Rs. 20,000 for goods delivered on I st April. Goods are sold by the trader at a pro tit of 25% on Cost. The value of physical inventory is(a) Rs. 1,98,000 (c) Rs. 2,02,000

3. Cost of stock as per books is Rs. 2,38,000

(b) Rs. 2,00,000 (d) Rs. 2,0-l,000

Goods purchases for Rs. 10,000 received but omined to be recorded Goods costing Rs. 20,000 were sold & delivered but omitted to be recorded Goods costing Rs. 5,000 were returned by customers but omitted to be recorded. Goods costing Rs. 3,000 were returned to suppliers but omitted to be recorded. The value of physical invemory is -(a) Rs. 2,26,000 (c) Rs. 2,46,000

4. Cost of Physical Stock Rs. 2,30,000

~ (b) Rs. 2,30,000 (d) None of these

Goods purchases for Rs. 10,000 received but omitted to be recorded Goods costing Rs. 20,000 were sold & delivered but omitted to be recorded Goods costing Rs. 5,000 were returned by customers but omitted to be recorded. Goods costing Rs. 3,000 were returned to suppliers but omitted to be recorded. The cost of stock as per books is -(a) Rs. 2,40,000 (c) Rs. 2.36,000

f(~ Rs. 2,38.000 t d) None of these

~ ~ir;i:.-· ~ .:>, 14.50 Fundamentals of Accounting for Common Pro~~iency Test (CPT) -------- -· ... .. .... ---- --- - ,.. _______ .. , ...... --•- ____ .. _

--........ .... __ ·-.. .. ..... ,, 5. Cost of Stock as per books is Rs. 2,38,000 t t b rece· ed d h d f R lo 000 and recorded but are ye O e iv ·

Goo s pure ase or s. , . Goods costing Rs. 20,000 sold and recorded but are yet to be_ dehvered. Goods costing Rs. 5,000 were returned by customers but o~itted to be recorded. Goods costing Rs. 3,000 were returned to suppliers but omitted to be recorded

(a) Rs. 2,26,000 (b Rs. 2,50,000

The vafue of physipal inventory is -

1 (c) Rs. 2,30,000 ) Rs. 2,46,000 6. CAS Ltd. follows perpetual inventory system. On March 31 of every year, the cornpa undertakes physical stock verification. On March 31, 2007, the value of stock as pe ny . th ~ 11 . r the records differed from the value as per the physical stock. On scrutiny, e 10 owmg differe

.

~ were noticed: Goods purchased for Rs. 20,000 were received and included in the physical stock but entry was made in the books.

no Goods costing Rs. 60,000 were sold and entered in the books but the stock is yet t b delivered. 0 e Goods worth Rs. 10,000 are returned to the suppliers but is omitted to be recorded. If the inventory is valued in the books at Rs. 3,00,000, the value of the physical inventory . (a) Rs. 2,22,000 (b) Rs. 3,78,000 18 @)) Rs. 3,70,000 (d) Rs. 3,18,000 7. CAS Ltd., a dealer in second-hand cars has the following five vehicles of different mod 1

d ak · h' es

an m es mt err stock at the end of the financial year 2006-07: Car Fiat Ambassador Maruti Esteem Maruti 800 Cost 1,80,000 2,30,000 5,50,000 2,00,000 Net realizable value (Rs.) 1,90,000 3,10,000 5,30,000 2,50,000 (a) Rs. 15,25,000 ft& R \VI s. 15,40,000 (c) Rs. 15,80,000 (d) Rs. 17,40,000

Zen 4,20,000 4,00,000

.. \, \ , (C)

~. td) \ ; . (a)

i. (~) 9, (l)

\6. (b)

3. (a) 10. (b) 1,. (t\)

·4. (d) 11. (a) \.\\. (c)

50\ \\

\ . l~) g, (c)

i. (.c) 9, (b)

\6. (b)

l. (c) ta .. (c) \1 . (c)

4. (d) \J . {~)

\5, tc)

set\\\ \. (a) l . (n) 1. (\) td) \\\) th) 1. (1) t\:I) tn) \'-\) 9. ~1) (,\) (\\) \,\\ t~iu) ll\) \.\X \ l '-)

set \\J

1. \C.:)

&. lil)

\ $. \\7)

2 .. \_t' 9~ \~)

\6 . \'-)

(\\\) \t ) \,n) td\ \\\\) l\\)

~- \nl }l\. \h\ \1. \O \

3. (b'

__ :_u~~wnof Inventory 14.51 ~ . __ ......

S.. (e) u. (1.) \9. (d)

!. (c) \l. (c)

5. lb)

6. (e) 11. (d) 18. (b)

6. (a) \3. (c)

6~ (d) (\·) (bl

,. 00 14. (c). 21. (d)

1-. ld) 14. (C)

( \V\ {U.\ (\\1) ( ., ) \ 't) (ul

l "l {c)

(V\) (d) (-v1) (d) (v\) (t> (--1ii) (a)

\W) l\'l

A. (~\ 5. (b ) \ \ . (bl \ 1. (c) \~. ta)

4. tb) S. \b) 6 .. (c>

1. (c) \4, (C)

, . (b)

Documents

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