Multiple Choice Questions

1. Cost of purchase does not include:

2. The purchase price.

3. Import duties.

4. The selling price.

5. Transportation costs.

6. Departure from lower- of -cost -or net realizable value (LCNRV) rule may be justified in situations when:

1. cost is difficult to determine.

2. items are readily marketable at quoted market prices.

3. units of product are interchangeable.

4. All above.

3. Premium on 6-month insurance policy during construction should be classified as the cost of:

1. Building.

2. Land.

3. Insurance premium (Expenses).

4. Land Improvement.

4. Computation of the depletion base involves:

1. Development costs.

2. Post-exploratory costs.

3. Acquisition cost.

4. Revaluation cost.

5. In case of Contributory Pension plans:

1. employer bears the entire cost.

2. employees voluntarily make payments to increase their benefits.

3. offer tax benefits.

4. All above