Inventory and Finance – End of Section Assessment

Question 1 of 9

1. Question

Inventory equates to a significant cost to any organisation. There is a legal requirement in most countries for companies to submit their end of financial year accounts. In the UK, the Statutory Accounts must include which two accounts? Select the correct two from the following list:

Inventory Account
Financial Liability Account
Debtors List
Balance Sheet
Profit and Loss Account

Question 2 of 9

2. Question

A Balance sheet is a financial statement that summarises an organisations assets, liabilities and shareholders’ equity. From the following list, select True or False as to whether it should appear on the Balance Sheet.

Fixed assets –

Current assets –

Average Salary –

Current liabilities –

Individual Liabilities Cost –

Long-term liabilities –

Choose From: True or False

Question 3 of 9

3. Question

Select True or False against each of the following statements regarding the Profit and Loss Account.

The Profit and Loss account is a document which shows the income of the business, as well as the costs which have been spent from the business during a given time-period –

The Profit and Loss account is a document which shows the financial losses of the business –

The Profit and Loss Account shows the Income and outgoings of a business –

Choose From: True or False

Question 4 of 9

4. Question

There are several methods of calculating the Value of Inventory, such as FIFO, LIFO and Average cost etc. Select the correct meaning of the two abbreviations of FIFO and LIFO below:

First in First Out
Late in First Out
Final Inventory Finally Optimised
Last in First Out

Question 5 of 9

5. Question

Inventory has a financial value, as in the purchase price of the inventory obtained. However there are additional costs associated with inventory, namely holding costs. Select the activities that are associated with inventory holding costs.

Pick Inventory
Despatch Inventory
Transport Inventory
Receive Inventory
Purchase Inventory
Demand Inventory
Count Inventory
Locate Inventory
Manage Inventory

Question 6 of 9

6. Question

There are two main types of costs associated with the control and storage of inventory; Fixed and Variable. Match the cost with the type of cost:

Rent and rates on premises –

Heat, Power and Lighting –

Overtime wages –

Insurance on premises –

Running costs for equipment –

Maintenance of Equipment –

Depreciation of capital items –

Fixed salaries –

Choose From: Fixed or Variable

Question 7 of 9

7. Question

Using the following information, select the correct Average Cost:

01/12/14	01/01/15	01/02/15	01/02/15	01/03/15	01/04/15
£152.55	£689.50	£1,550.00	£1,550.00	£152.55	£359.25

£742.31
£472.30
£471.88
£869.00

Question 8 of 9

8. Question

From the following list, select the liabilities that could be owed to an organisation:

Capital and reserves
Stock
Money owed to suppliers
VAT
National Insurance
Pre-payments
Cash in-hand
PAYE

Question 9 of 9

9. Question

As the Inventory that an organisation holds represents a significant financial risk, it is necessary to count the inventory. Select True or False against each of the following possible types of Inventory counting methods:

Periodic –

Rotational –

Perpetual –

Plutonic –

Needs Must –

Choose From: True or False