The Measurement Rule for Inventories, Mandated by IAS 2 Inventories

question 27

Multiple Choice

The measurement rule for inventories, mandated by IAS 2 Inventories, is:

• A) lower of fair value and selling price;
• B) lower of cost and net realisable value;
• C) higher of initial cost and realisable value;
• D) higher of completion costs and replacement costs.

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Definitions:

Internet Auction

An online platform where goods and services are sold to the highest bidder through competitive bidding processes.

Elasticity of Demand

A measure of how much the quantity demanded of a good responds to a change in its price.

Marginal Cost

The increase in cost that arises from the production of one additional unit of a good or service.

Urban Professionals

A group of highly educated workers who typically work in professions found in urban centers, such as finance, law, and technology.