Accounting Online Program Certification Practice Test

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Prepare for the Accounting Online Program Certification Test. Use flashcards and multiple choice questions with detailed explanations. Ace your accounting certification exam with confidence!

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What was the adjusted figure for inventories that Quebec Ltd should report for the year ended 31 December 20X4?

£836,200
£838,100
£840,000
£834,500

The correct answer is: £838,100

To determine the adjusted figure for inventories that Quebec Ltd should report for the year ended 31 December 20X4, it's essential to consider various factors that typically influence inventory values. These can include adjustments for obsolescence, shrinkage, errors in prior period reporting, or adjustments based on the lower of cost or net realizable value. In this case, if the answer is stated to be £838,100, it likely reflects a careful consideration of all these factors. It suggests there may have been some adjustments made to the raw inventory figures. This could involve recognizing slow-moving or obsolete goods that need to be written down, or correcting any overstatements from prior periods. The figure indicates that after all necessary evaluations and corrections have been applied to the inventory valuation, £838,100 is the amount that faithfully represents the current value of Quebec Ltd's inventories as of the end of the reporting period. This aligns with accounting principles that emphasize accuracy and conservatism in reporting, ensuring that the reported inventory reflects a true economic situation while adhering to applicable accounting standards.