MCQ for CA Final FR - Chapter 2 Ind AS 2 & 16 : Inventories , & Property, Plant and Equipment

Sample Multiple Choice Questions (MCQ's) for CA Final - Paper 1 - Financial Reporting - Chapter 2: INDIAN ACCOUNTING STANDARD 2 & 16 : Inventories , & Property, Plant and Equipment - For Practice relevant for May/Nov 23 Examinations

Q:1 An entity holds inventories of 10,000 units and it could sell the same in the market @`10 each. The entity has an order in hand to sell the inventories @`11. The incremental selling cost per unit is`0.50 per unit.

In this situation, what is the net realisable value?

  1. 10
  2. 10.5
  3. 11
  4. 11.5

Answer: 2

 

Q:2 ABC Ltd. buys goods from an overseas supplier. It has recently taken delivery of 1,000 units of component X. The quoted price of component X was`1,200 per unit but ABC Ltd. has negotiated a trade discount of 5% due to the size of the order.

The supplier offers an early settlement discount of 2% for payment within 30 days and ABC Ltd. intends to achieve this. 

Import duties (basic custom duties) of`60 per unit must be paid before the goods are released through custom. Once the goods are released through customs, ABC Ltd. must pay a delivery cost of`5,000 to have the components taken to its warehouse. Calculate the cost of inventory

 

  1. 1200000
  2. 1260000
  3. 1205000
  4. 1265000

Answer: 3

 

Q:3 A business plans for production overheads of`10,00,000 per annum.
The normal level of production is 1,00,000 units per annum.
Due to supply difficulties the business was only able to make 75,000 units in the current year. Other costs per unit were`126.
Calculate the per unit cost.

 

  1. 126
  2. 136
  3. 116
  4. 146

Answer: 2

 

Q:4 A business plans for production overheads of`10,00,000 per annum.
The normal level of production is 1,00,000 units per annum
Due to supply difficulties the business was only able to make 75,000 units in the current year. Other costs per unit were`126
Calculate the amount of overheads to be expensed during the year

 

  1. 240000
  2. 260000
  3. 250000
  4. 200000

Answer: 3

 

Q:5 ABC Ltd. manufactures control units for air conditioning systems.
Each control unit requires the following:
1 component X at a cost of`1,205 each
1 component Y at a cost of`800 each
Sundry raw materials at a cost of`150 each
The company faces the following monthly expenses:
Factory rent`16,500
Energy cost`7,500
Selling and administrative costs`10,000
Each unit takes two hours to assemble. Production workers are paid`300 per hour.
Production overheads are absorbed into units of production using an hourly rate.The normal level of production per month is 1,000 hours.
Determine the cost of inventory.

 

  1. 2803
  2. 2823
  3. 2800
  4. 2811

Answer: 1

 

Q:6 ABC Ltd. manufactures and sells paper envelopes.The stock of envelopes was included in the closing inventory as of 31st March, 20X1, at a cost of`50 per pack.
During the final audit, the auditors noted that the subsequent sale price for the inventory at 15th April, 20X1, was`40 per pack.Furthermore, enquiry reveals that during the physical stock take, a water leakage has created damages to the paper and the glue. Accordingly, in the following week, ABC Ltd. has spent a total of`15 per pack for repairing and reapplying glue to the envelopes.
Calculate the net realizable value

 

  1. 20
  2. 23
  3. 25
  4. 22

Answer: 3

 

Q:7 An asset which cost`10,000 was estimated to have a useful life of 10 years and residual value `2000. After two years, useful life was revised to 4 remaining years. Calculate the depreciation charge for the year 3

 

  1. 800
  2. 1200
  3. 1600
  4. 2400

Answer: 3

Q:8 An item of PPE was purchased for`9,00,000 on 1st April, 20X1. It is estimated to have a useful life of 10 years and is depreciated on a straight line basis. On 1st April, 20X3, the asset is revalued to `9,60,000. The useful life remains unchanged as ten years. Ignore impact of deferred taxes.
Calculate Additional Depreciation.

 

  1. 30000
  2. 30600
  3. 25000
  4. 25600

Answer: 1

CA Final - Paper 1 - FR - Chapter 3   

 

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