Accounting 0452 · IGCSE · Valuation of inventory

Valuation of inventory — practice question

Nala trades in stationery. She gave the following details about her inventory at 28 February 2022.
(a(i))[6]

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

(a(ii))[1]

State the accounting principle used to value inventory.

(b(i))[4]

Complete the table by putting a tick (✓) to show how Nala should treat each item of her expenditure.

(b(ii))[2]

Explain how the materiality principle is applied to the treatment of non-current assets.

(c)[2]

Complete the table by putting a tick (✓) to show the effect of the error on capital and on liabilities.

(d)[5]

Advise Nala whether or not she should change her depreciation method. Justify your answer.

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