SSC CGL Finance – Valuation of Inventories – Level 2 · Exam Level · Paper III Sprint
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Answer: Two. II and III are true.
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SSC CGL Finance – Valuation of Inventories – Level 2 · Exam Level · Paper III Sprint – 15 questions, subject: Finance & Economics (Tier II Paper III). Every question has the correct answer with a one-line explanation; tap "Show Answer". Free practice for TNPSC, UPSC, SSC, Bank and RRB exams – Shanmugam IAS Academy, Coimbatore.
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1.
An item costs ₹ 640. Its estimated selling price is ₹ 750, cost to complete ₹ 90 and selling costs ₹ 35. It is valued at:
Correct Answer: B [₹ 625]
Explanation:
NRV = 750 − 90 − 35 = 625 < 640.
2.
Three items: P cost ₹ 30,000, NRV ₹ 34,000; Q cost ₹ 22,000, NRV ₹ 19,000; R cost ₹ 16,000, NRV ₹ 15,000. Value of inventory (AS 2) is:
Correct Answer: D [₹ 64,000]
Explanation:
30,000 + 19,000 + 15,000 = 64,000.
3.
List price ₹ 1,50,000; trade discount 8%; freight inward ₹ 4,500; GST ₹ 24,840 with full input tax credit. Cost of purchase is:
Correct Answer: C [₹ 1,42,500]
Explanation:
1,38,000 + 4,500 = 1,42,500; recoverable GST is left out.
4.
Opening 100 units @ ₹ 20; purchases 200 units @ ₹ 23 and then 150 units @ ₹ 25; 280 units sold. Closing stock under FIFO is:
Correct Answer: A [₹ 4,210]
Explanation:
Closing 170 = 150 @ 25 + 20 @ 23 = 4,210.
5.
Same data (opening 100 @ ₹ 20; purchases 200 @ ₹ 23 and 150 @ ₹ 25; 280 sold). Closing stock at periodic weighted average is:
Correct Answer: D [₹ 3,910]
Explanation:
10,350 ÷ 450 = 23; 170 × 23 = 3,910.
6.
Moving average: opening 400 units @ ₹ 10; purchase 600 units @ ₹ 15; issue 500 units; purchase 500 units @ ₹ 17. The rate after the second purchase is:
Correct Answer: A [₹ 15]
Explanation:
After first purchase 13; 500 @ 13 = 6,500 + 8,500 = 15,000 ÷ 1,000 = 15.
7.
Closing stock of 2024-25 was overvalued by ₹ 9,000. The profit of 2025-26 (the next year) is:
Correct Answer: C [Understated by ₹ 9,000]
Explanation:
Opening stock of 2025-26 is too high → COGS too high → profit low.
8.
Two-quantity comparisonOpening 100 units @ ₹ 20; purchases 200 @ ₹ 23 and 150 @ ₹ 25; 280 units sold.
Quantity I: closing stock under FIFO
Quantity II: closing stock under periodic weighted average
Quantity I: closing stock under FIFO
Quantity II: closing stock under periodic weighted average
Correct Answer: A [Quantity I > Quantity II]
Explanation:
QI = 4,210; QII = 3,910 (prices rising).
9.
Opening stock ₹ 50,000; purchases ₹ 2,00,000; sales ₹ 2,40,000; gross profit 20% on sales. Estimated closing stock is:
Correct Answer: B [₹ 58,000]
Explanation:
COGS = 1,92,000; 2,50,000 − 1,92,000 = 58,000.
10.
Goods are sold at a mark-up of 60% on cost. The gross profit as a percentage of sales is:
Correct Answer: B [37.5%]
Explanation:
Answer: 37.5%. 60 ÷ 160 = 37.5%.
11.
Match the followingMatch the cost formula with its feature:
P. FIFO Q. Weighted average R. Specific identification
1. Total cost ÷ total units 2. Earliest goods issued first 3. Custom-made items
P. FIFO Q. Weighted average R. Specific identification
1. Total cost ÷ total units 2. Earliest goods issued first 3. Custom-made items
Correct Answer: A [P-2, Q-1, R-3]
Explanation:
Answer: P-2, Q-1, R-3. As defined in AS 2.
12.
Assertion–Reason
A: Raw materials are not written down below cost if the finished products in which they will be used are expected to be sold at or above cost.
R: The cost of the materials will be recovered through the sale of those finished products.
A: Raw materials are not written down below cost if the finished products in which they will be used are expected to be sold at or above cost.
R: The cost of the materials will be recovered through the sale of those finished products.
Correct Answer: C [Both A and R are true and R explains A]
Explanation:
AS 2 para 24 – no loss will arise.
13.
Closing stock at selling price ₹ 2,40,000; average gross margin 30% of selling price (retail method). Cost of closing stock is:
Correct Answer: D [₹ 1,68,000]
Explanation:
Answer: ₹ 1,68,000. 70% × 2,40,000 = 1,68,000.
14.
Spot My Mistake“Item M: cost ₹ 14,000, NRV ₹ 17,000; item N: cost ₹ 9,000, NRV ₹ 6,000. Total cost ₹ 23,000 = total NRV ₹ 23,000, so stock = ₹ 23,000.” The correct value is:
Correct Answer: A [₹ 20,000]
Explanation:
Item by item: 14,000 + 6,000 = 20,000.
15.
True/false countHow many statements are true?
I. LIFO is one of the cost formulas named in AS 2.
II. Recoverable taxes are excluded from the cost of purchase.
III. Selling costs are deducted in arriving at NRV.
IV. Abnormal wastage is included in the cost of inventories.
I. LIFO is one of the cost formulas named in AS 2.
II. Recoverable taxes are excluded from the cost of purchase.
III. Selling costs are deducted in arriving at NRV.
IV. Abnormal wastage is included in the cost of inventories.
Correct Answer: C [Two]
Explanation:
Answer: Two. II and III are true.
➤ Full notes, shortcuts and every answer explained – SSC CGL 2026 Finance & Economics (Tier II Paper III) book (₹149): www.shanmugamiasacademy.in/study-materials/ssc-cgl-finance-economics
📘 SSC CGL 2026 – General Studies – Finance & Economics (Tier II Paper III)
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