According to IAS 2 Inventories Include Assets

question 34

Multiple Choice

According to IAS 2 inventories include assets:

• A)such as service contracts arising under construction contracts.
• B)held over the long term for use in the production process.
• C)such as financial instruments.
• D)held in the process of production, preparation or conversion for sale.

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Definitions:

Credit Sales

Sales made by a business where payment is delayed as per agreement, acknowledging the goods are sold on credit.

Selling Price

The amount of money for which a product or service is sold, determined by factors such as cost, market demand, and competition.

Raw Materials Inventory

The total cost of all components and materials stored and awaiting use in the production process, forming a significant part of a manufacturing company's current assets.

Production Needs

The requirements and resources necessary to complete the manufacturing process for goods or services.