PRC-1 · Chapter 7 · Question 64 of 100
Which of the following costs must be EXCLUDED from the capitalized cost of inventories?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Storage costs of finished goods, unless those costs are necessary in the production process before a further production stage.
Explanation
Storage costs for finished goods do not bring the inventory to its present condition and location for sale. They are treated as an expense in the period they are incurred.
More IAS 2: Inventories MCQs
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