Multiple Choice Question
1 Raw materials and merchandise inventories are included in
(a) Expenses
(b) Fixed assets
(c) Cash
(d) Current assets
(e) None of these
2 According to IAS 2, inventories are assets
(a) Which exclude materials or supplies to be consumed in the production process or in the rendering of services?
(b) Consumed in the process of production only to protect the purchasing power of the items they comprise
(c) Held for sale in the ordinary course of business
(d) That describes the cumulative labor cost incurred to support the production process
3 In an income statement by nature, change in the value of the inventory of finished products is reported
(a) Always on the revenues side, under the sales of finished products
(b) Always on the expenses side, under the purchases of raw materials
(c) Both of the above cases are possible, it depends on the sign of the change