Here's the question bank on all the accountancy topics.
According to AS-2, which of the following costs should be included in valuing the inventories of a manufacturing company?(A) Freight and insurance(B) Carriage outwards(C) Depreciation of factory plant(D) General administrative overheadsChoose the most appropriate answer from the options given below:
The correct answer is A and C only Accounting standard - 2: Valuation of InventoriesThe objective of this standard is to formulate the method of computation of cost of inventories/stock, to determine the value of closing stock/ inventory at which, the inventory is to be shown in balance sheet till its sale and recognition as revenue. Important PointsIn Inventory Cost should include all: costs of purchase (including taxes, transport, and handling) net of trade discounts receivedcosts of conversion (including fixed and variable manufacturing overheads) including depreciation of factory plantother costs incurred in bringing the inventories to their present location and condition including freight and insurance
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