FA – May 2016 – L1 – SA – Q6 – Accounting for Inventories in Accordance with IAS 2

A question about the components that are part of the cost of inventories according to IAS 2.

Question

Question:
Which of the following is NOT part of the cost of inventories, in relation to IAS 2 Inventories?
A. The purchase price
B. Import duties
C. Transport costs
D. Handling costs
E. Selling costs

Answer

Answer:
E. Selling costs

Explanation:
IAS 2 defines the cost of inventories to include all costs incurred in bringing the inventories to their present location and condition. This includes purchase price, transport, and handling costs, but excludes selling costs, which are recognized separately in the financial statements.

Tags: Costs, IAS 2, Inventories
Level: Level 1

Topic: Accounting for Inventories (IAS 2)
Series: MAY 2016

Uploader: Kwame Aikins

FA – May 2016 – L1 – SA – Q6 – Accounting for Inventories in Accordance with IAS 2

A question about the components that are part of the cost of inventories according to IAS 2.

Explanation:
IAS 2 defines the cost of inventories to include all costs incurred in bringing the inventories to their present location and condition. This includes purchase price, transport, and handling costs, but excludes selling costs, which are recognized separately in the financial statements.

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FA – May 2016 – L1 – SA – Q6 – Accounting for Inventories in Accordance with IAS 2

A question about the components that are part of the cost of inventories according to IAS 2.

Explanation: IAS 2 defines the cost of inventories to include all costs incurred in bringing the inventories to their present location and condition. This includes purchase price, transport, and handling costs, but excludes selling costs, which are recognized separately in the financial statements.

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Explanation:
IAS 2 defines the cost of inventories to include all costs incurred in bringing the inventories to their present location and condition. This includes purchase price, transport, and handling costs, but excludes selling costs, which are recognized separately in the financial statements.