MAC Inventory (Materials)

Reasons for holding inventory are:

• To avoid production stoppages due to shortage of materials

• To take advantage of quantity discounts

• To avoid detrimental effects of price fluctuation

• To provide buffer

Which one is an example of ethical behaviour valuing inventory by an accountant?

• In a objective way

• In accordance with IAS-2

• To maximise profit

• influenced by owner

Accounts for Receipt of material into inventory ,paying on credit is

• Dr Inventory, Cr Trade Payables

• Dr Production, Cr Inventory

• Dr Inventory, Cr Bank

• Dr Inventory, Cr Production

A grocer sells fresh fruit and vegetables that have a short shelf life. Which method will be most appropriate for inventory valuation

• FIFO

• LIFO

• AVCO

This method is used where issues are picked from the

most recent deliveries

• FIFO

• LIFO

• AVCO

AVCO costs issues of stock at the oldest purchase price

• True

• False

FIFO gives the largest profit when the costs of stock are falling

• True

• False

LIFO should only be used within an organisation

• True

• False

Minimum inventory level is also known as buffer inventory

• True

• False

This document helps to control the movement of materials and assess inventory levels

• Stores record card

• Goods returned note

• Purchase Requisition

• Delivery note