Accounting Multiple Choice Question – 11 September 2022

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

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Inventory has been damaged.

  • The Inventory cost £1,200.
  • It would have sold for £1,800 when perfect.
  • It can be sold for £1,700 if repairs are undertaken at a cost of £600.
  • To replace the inventory would cost £1,000.

At what value should the damaged inventory be shown in the final accounts?

Select ONE answer:

  1. £1,000
  2. £1,100
  3. £1,200
  4. £1,800

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

  1. Not correct
  2. Correct– Lower of cost or NRV ==> £1,200 vs (£1,700 – £600)
  3. Not correct
  4. Not correct

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