📘 (Stores & Inventory)
Topics: Inventory Accounting | Stores Ledger | Stock Verification | Surplus Stores
🔹 Inventory Accounting
1.
Closing stock under FIFO during rising prices will be:
A. Lowest
B. Highest
C. Average
D. Same as LIFO
Answer: B
2.
Under LIFO, cost of goods sold is:
A. Lower
B. Higher
C. Same
D. Uncertain
Answer: B
3.
Weighted average cost = ₹10,000 / 500 units. Issue price:
A. ₹10
B. ₹20
C. ₹25
D. ₹5
Answer: B
4.
Inventory valuation includes:
A. Purchase cost
B. Conversion cost
C. Other costs
D. All
Answer: D
5. 🔥
If NRV < Cost, inventory valued at:
A. Cost
B. NRV
C. Average
D. Replacement cost
Answer: B
6.
Abnormal loss is:
A. Included in inventory
B. Charged to P&L
C. Deferred
D. Ignored
Answer: B
7.
Normal loss is:
A. Charged separately
B. Included in cost
C. Ignored
D. Capitalized
Answer: B
8.
Inventory turnover ratio = COGS / Avg stock. Higher ratio means:
A. Slow movement
B. Efficient management
C. Overstocking
D. Loss
Answer: B
9. 🔥
Goods in transit (FOB shipping point) included in:
A. Buyer stock
B. Seller stock
C. Both
D. None
Answer: A
10.
Inventory is classified as:
A. Fixed asset
B. Current asset
C. Liability
D. Expense
Answer: B
🔹 Stores Ledger
11.
Stores ledger maintained by:
A. Storekeeper
B. Cost accountant
C. Auditor
D. Manager
Answer: B
12.
Bin card maintained by:
A. Cost dept
B. Store dept
C. Finance
D. Audit
Answer: B
13. 🔥
Difference between bin card & stores ledger due to:
A. Timing difference
B. Error
C. Theft
D. All
Answer: D
14.
Stores ledger shows:
A. Quantity only
B. Value only
C. Both quantity & value
D. None
Answer: C
15.
Perpetual inventory system means:
A. Annual stock
B. Continuous recording
C. No recording
D. Monthly check
Answer: B
16. 🔥
Under FIFO, issue made from:
A. Latest stock
B. Oldest stock
C. Average
D. Any
Answer: B
17.
EOQ formula balances:
A. Purchase cost
B. Carrying & ordering cost
C. Labour cost
D. Selling cost
Answer: B
18.
Maximum level depends on:
A. EOQ
B. Lead time
C. Reorder level
D. All
Answer: D
19. 🔥
Reorder level = Max consumption × Max lead time
True or False?
A. True
B. False
C. Partially true
D. None
Answer: A
20.
Minimum level formula:
A. RL – (Normal × Normal LT)
B. RL – (Avg × Avg LT)
C. RL – (Max × Max LT)
D. None
Answer: A
🔹 Stock Verification
21.
Stock verification ensures:
A. Accuracy
B. Existence
C. Ownership
D. All
Answer: D
22.
Perpetual stock verification means:
A. Annual check
B. Continuous check
C. Random check
D. No check
Answer: B
23. 🔥
Surplus in stock implies:
A. Theft
B. Error
C. Under-recording
D. Over-issue
Answer: C
24.
Shortage in stock indicates:
A. Over-recording
B. Loss/theft
C. Correct record
D. Surplus
Answer: B
25.
Stock-taking frequency depends on:
A. Value
B. Nature
C. Movement
D. All
Answer: D
26. 🔥
If physical stock > book stock, treatment:
A. Debit P&L
B. Credit P&L
C. Ignore
D. Capitalize
Answer: B
27.
Stock discrepancies adjusted through:
A. Journal
B. Stores ledger
C. Both
D. None
Answer: C
28.
Stock verification done by:
A. Independent team
B. Storekeeper
C. Auditor
D. Manager
Answer: A
29.
Cut-off procedures ensure:
A. Correct valuation
B. Correct timing
C. Accuracy
D. Audit
Answer: B
30. 🔥
Stock in hand includes:
A. Consignment goods
B. Owned goods
C. Goods sold
D. Goods lost
Answer: B
🔹 Surplus Stores
31.
Surplus stores are:
A. Required stock
B. Excess/unutilized stock
C. Scrap
D. Waste
Answer: B
32.
Obsolete stores mean:
A. Useful
B. Outdated
C. New
D. Temporary
Answer: B
33. 🔥
Idle stores are:
A. Obsolete
B. Temporarily unused
C. Scrap
D. Damaged
Answer: B
34.
Disposal of surplus stores done by:
A. Sale
B. Transfer
C. Auction
D. All
Answer: D
35.
Reserve price fixed based on:
A. Cost
B. Market value
C. Scrap value
D. All
Answer: D
36. 🔥
Loss on disposal of stores treated as:
A. Capital loss
B. Revenue loss
C. Deferred
D. Contingent
Answer: B
37.
Scrap value refers to:
A. Original cost
B. Residual value
C. Market price
D. Book value
Answer: B
38.
Surplus stores arise due to:
A. Over-purchase
B. Change in design
C. Poor planning
D. All
Answer: D
39. 🔥
Obsolete stores valuation:
A. Cost
B. NRV
C. Scrap value
D. Zero
Answer: C
40.
Write-off of obsolete stores requires:
A. Approval
B. Audit
C. Verification
D. All
Answer: D
🔹 Numerical + Mixed Concepts
41.
EOQ = √(2AB/C). If A=1000, B=50, C=2 → EOQ?
A. 158
B. 224
C. 316
D. 500
Answer: B
42. 🔥
Reorder level = 200 units/day × 10 days = ?
A. 2000
B. 1000
C. 500
D. 1500
Answer: A
43.
Average stock = (Max + Min)/2. If 500 & 100 → ?
A. 200
B. 300
C. 400
D. 600
Answer: B
44.
Inventory turnover = 10 times → implies:
A. High stock
B. Fast movement
C. Loss
D. Overstock
Answer: B
45. 🔥
If cost = ₹100, NRV = ₹90 → value?
A. ₹100
B. ₹90
C. ₹95
D. ₹110
Answer: B
46.
Carrying cost increases → EOQ:
A. Increases
B. Decreases
C. Same
D. Doubles
Answer: B
47.
Ordering cost increases → EOQ:
A. Increases
B. Decreases
C. Same
D. Zero
Answer: A
48. 🔥
Stock shortage of ₹5,000 → treatment?
A. Asset
B. Expense
C. Liability
D. Income
Answer: B
49.
FIFO closing stock during falling prices:
A. High
B. Low
C. Average
D. Same
Answer: B
50. 🔥
If bin card shows 100 units but ledger shows 120:
A. Shortage
B. Surplus
C. Error
D. Fraud
Answer: A
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