Accounting 0452 · IGCSE · Valuation of inventory

Valuation of inventory — practice question

Nala trades in stationery, buying and selling it. She gave the following figures for her inventory as at 28 February 2022.
(a(i))[6]

Calculate the value of Nala’s inventory as at 28 February 2022.

(a(ii))[1]

State the accounting principle used when valuing inventory.

(b(i))[4]

Fill in the table by inserting a tick (✓) to show how Nala should record each item of expenditure.

(b(ii))[2]

Explain how the materiality principle affects the treatment of non-current assets.

(c)[2]

Fill in the table by placing a tick (✓) to show the effect of the error on capital and on liabilities.

(d)[5]

Advise Nala whether she ought to change her depreciation method. Justify your answer.

Worked solution & mark scheme

This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: Paper packs: 4.50 \times 240 = 1 080

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