Accounting Online Program Certification Practice Test

What is the total value of inventories for Lamp at 31 December 20X9?

1. £14,000

2. £8,600

3. £10,000

4. £12,000

The correct answer is: £12,000

To determine the total value of inventories for Lamp at 31 December 20X9, you would typically consider factors such as the cost of goods purchased, the beginning inventory, and any goods sold during the period. Assuming the correct answer is £12,000, this figure likely derives from the application of an appropriate inventory valuation method, such as FIFO (First In, First Out), LIFO (Last In, First Out), or the weighted average cost method. To arrive at this total, you would evaluate the inventory records and consider any adjustments for damaged goods, obsolescence, or shrinkage. The calculation might involve adding the value of any newly acquired inventory to the beginning balance and subtracting the cost of inventory sold during the year. This total is significant because it directly affects the cost of goods sold (COGS) and therefore gross profit, impacting the overall financial statements. Understanding how to accurately compute inventory values is crucial for maintenance of proper financial records and reporting, which is a foundational aspect of accounting. For further context, the other options represent values that are likely derived from flawed calculations or omissions within the inventory data, such as not considering all relevant purchases or incorrectly accounting for sold items.