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Sunday, February 22, 2015

Reviewer in Inventories by PRTC (2011 Edition)

The accounting principles and concepts in the accounting for inventories are covered by the Philippine Accounting Standards (PAS) 2 Inventories. The main focus of the Standard is to require entities to measure their inventories at the lower of cost or net realizable value (NRV). Once again, the accounting concept of conservatism is emphasized here.

Furthermore, the Standard also provides rulings as to the initial measurement (which should be at cost) and the subsequent measurement of inventories. There are various acceptable methods of determining cost and these includes Specific Identification, First-in First-Out (FIFO) and the Weighted Average Cost.

If you want to access the detailed content of IAS 2, you can visit the official website of the IFRS foundation through www.ifrs.org . On the other hand, if you are the type of person who hates detailed content and wants to access directly the main points provided by this Standard, you can browse www.iasplus.com which is updated regularly by Deloitte Global Services Limited which is a member of Deloitte Touche Tohmatsu Limited.

Anyway, provided in the link below is a scanned copy of the review material used during our CPA Review Sessions. The material is outlined as follows:

1. TOA.1205 Lecture Notes - which provides summarized content of the PAS 2 Inventories.
2. TOA.1205B Practice Drill - which provides multiple choice questions tailored based on the outlined flow of IAS 2.
3. TOA.1205CD Classroom Drill - which provides multiple choice questions that are usually covered during the actual CPA Board Examinations.


Provided also below are the answers to the multiple choice questions of the Practice Drill, Classroom Drill and the Take Home Drill:

Answer Key:

Practice Drill
Classroom Drill
1. D
1. A
2. C
2. A
3. C
3. D
4. D
4. D
5. D
5. A
6. B
6. A
7. B
7. D
8. D
8. A
9. C
9. D
10. D
10. D
11. A
11. A
12. C
12. A
13. B
14. D
15. D

*Author's Note: These materials are intended solely for review and academic use specifically published to help aspiring CPA Reviewees and accountancy students prepare for the Philippine Certified Public Accountant (CPA) Board Examinations. Copying and distributing such materials are considered violations of the copyright law and may result to legal proceedings.

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