ACCA FA · Chapter 5 · Question 5 of 10
A business had the following inventory movements in March: 1 March: opening inventory 100 units at $5.00 4 March: purchased 200 units at $5.50 15 March: sold 180 units 20 March: purchased 150 units at $6.00 28 March: sold 170 units Using the FIFO method, what is the value of closing inventory at 31 March?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) $600
Explanation
Closing units = 100 + 200 - 180 + 150 - 170 = 100 units. Under FIFO the oldest units are sold first, so the 100 units remaining are from the most recent purchase on 20 March at $6.00: 100 x $6.00 = $600. The other figures come from averaging methods or from valuing at the oldest cost.
More Inventory (IAS 2) MCQs
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