PRC-1 · Chapter 7 · Question 26 of 100
How are trade discounts treated when determining the cost of inventory?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) They are deducted from the purchase price.
Explanation
IAS 2 specifies that trade discounts, rebates, and other similar items are deducted in determining the costs of purchase.
More IAS 2: Inventories MCQs
- Q28A business has 200 units of stock. The units cost Rs. 22 each. What is the value of the closing stock?
- Q29In a manufacturing entity, which of the following items is considered 'Work in Progress' (WIP)?
- Q30Which inventory valuation method assumes that the items of inventory that were purchased or produced first are sold first?
- Q31Which of the following is NOT a disclosure requirement specified in IAS 2?
- Q32Under a periodic inventory system, how is the 'Cost of Sales' figure derived at the end of the accounting period?