1

The use of the first-in first-out (FIFO) method of valuing inventory means that:

1. The most recent goods acquired are assumed to be included in closing inventory
2. The earliest goods acquired are assumed to comprise closing inventory
3. Cost of sales is assumed to consist of the most recent goods acquired
4. Cost of sales is assumed to consist of the oldest goods acquired
5. A and D are correct

QUESTION 2

The statement regarding accumulated depreciation that is true is:

1. It helps calculate the market value of an asset
2. It is classified as a liability
3. It reflects the portion of the cost of an asset that has been assigned as an expense
4. All of the above
5. None of the above

QUESTION 3

The AASB Framework's definition of an asset is:

1. a resource owned by the business that will provide future benefits.
2. a resource controlled by the entity as a result of past events and from which economic benefits are expected to flow to the entity.
3. an item of value held by the entity.
4. the claims of outsiders against the entity.

QUESTION 4

Typical liability classes found on a balance sheet are payables, borrowings, and provisions.

1. True
2. False