PRC-1 · Chapter 7 · Question 1 of 100
Which of the following costs is NOT included in the cost of inventory according to IAS 2?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Selling costs
Explanation
Selling costs do not contribute to bringing the inventory to its present location and condition, so they are explicitly excluded from the cost of inventory and recognized as expenses when incurred.
More IAS 2: Inventories MCQs
- Q3When inventory is sold, how is its carrying amount treated in the financial statements?
- Q4Which of the following statements correctly distinguishes between the periodic and perpetual inventory systems?
- Q5An entity suffered a loss of stock worth Rs. 80,000. It recovered 70% of the value in cash from its insurance company. Under a perpetual…
- Q6Which of the following cost measurement formulas is explicitly NOT permitted under IAS 2?
- Q7An inventory item was purchased for Rs. 7,000 per unit. Its estimated sales price is Rs. 10,000, but a selling cost of Rs. 3,200 will be…