PRC-1 · Chapter 7 · Question 16 of 100
Which of the following expenditures should be included in the capitalized cost of inventory?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Non-refundable import duties and taxes.
Explanation
IAS 2 states that the cost of purchase includes the purchase price, import duties, and other non-refundable taxes, as well as transport and handling costs. Abnormal waste, storage of finished goods, and admin overheads must be expensed.
More IAS 2: Inventories MCQs
- Q18An entity uses a perpetual inventory system. Which TWO journal entries are simultaneously required to record a sale of goods on credit?
- Q19According to IAS 2, how should unallocated fixed production overheads be treated when actual production is abnormally low?
- Q20Which of the following items is EXCLUDED from the scope of IAS 2 Inventories?
- Q21A business bought 30 cars. Under which of the following circumstances would these cars be classified as 'Inventory'?
- Q22Which of the following definitions correctly describes 'Prime Cost'?