Valuation of Inventory (Cambridge (CIE) O Level Accounting): Exam Questions

Ned values one type of asset by choosing the lower value between the cost value and the net realisable value.

What type of asset is Ned valuing?

At the end of the financial year, Adam had the following items of jewellery in his inventory.

• 50 rings: cost price per unit $40, selling price per unit $60

• 10 bracelets: cost price per unit $30, selling price per unit $25

What was the value of Adam's inventory?

Anya provided the following information about her inventory at the end of the financial year.

What was the total value of Anya's inventory?

Felipe sells one product in two different colours, red and yellow.

The following information is available about his inventory at the end of the financial year.

Felipe also found that 50 units of the yellow product were damaged and were unsaleable.

What was the total value of Felipe's inventory?

Rosa provided the following information about her inventory at the end of her financial year.

• total number of units 400

• cost price of each unit $5

• net realisable value of each unit $8

Rosa discovered that 60 of these units were damaged and could be sold for $4 per unit.

What was the value of the closing inventory?

Aisha has some goods which cost $400 and which can be sold for $500. When valuing her closing inventory, Aisha valued the goods at $500.

What is the effect of this error?

Hamid has inventory which cost $550. After repairs costing $60, the inventory could be sold for $600.

What is the value of Hamid's inventory?