Note – Please take our quiz ‘Quiz 21 – Inventory – (Answers)‘ on this page before going through the below answers. Only the top 3% of our audience scored 10/10 in all of them.
- Name – Quiz 21 – Inventory – (Answers)
- Topic – Inventory
- Answers with Explanation
Q1. Inventory is a/an _____ asset.
Ans. Inventory is a current asset. It is neither a liquid nor a fixed asset.
Q2.Inventory is a collective term used for a company’s raw material, work-in-progress, & _____.
Ans. Inventory or stock is a term used to describe the combination of a business’ raw materials used in production, stock work-in-progress, and finished goods.
Q3. Sale of inventory is shown in _____.
Ans. It is a direct income therefore it is shown in the trading account. Closing inventory (stock) is shown in the balance sheet.
Q4. Closing inventory is shown in _____.
Ans. It is a part of the current asset and is shown in the balance sheet.
Q5. Raw Material = 5,000, Finished Goods = 3,000, Factory Tools = 10,000, Inventory _____?
Ans. Total inventory = Raw Material + WIP + Finished Goods = 5,000 + 0 + 3,000 = 8,000.
Q6. Which of the following is not inventory?
Ans. Factory equipment is a fixed tangible asset, not a part inventory (stock).
Q7. Partially completed goods are called _____ inventory.
Ans. Partially complete means ‘not complete’. Such stock is called material work-in-progress.
Q8. Inventory is valued at cost or _____ whichever is less.
Ans. Inventory is valued at cost or NRV whichever is lower.
Q9. Inventory is only depreciated with the straight-line method.
Ans. The given statement is False. Inventory is a current asset and it cannot be depreciated.
