SSC CGL Finance – Valuation of Inventories – Level 3 · Challenge

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SSC CGL Finance – Valuation of Inventories – Level 3 · Challenge – 8 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.  
Jan 1 opening 300 units @ ₹ 40; Jan 10 purchased 200 @ ₹ 45; Jan 15 issued 400; Jan 20 purchased 300 @ ₹ 50; Jan 28 issued 250. Closing stock under FIFO is:

Correct Answer: B [₹ 7,500]

Explanation:

150 units, all from the 20 January lot: 150 × 50 = 7,500.

2.  
Jan 1 opening 300 units @ ₹ 40; Jan 10 purchased 200 @ ₹ 45; Jan 15 issued 400; Jan 20 purchased 300 @ ₹ 50; Jan 28 issued 250. Closing stock under moving average is:

Correct Answer: D [₹ 7,200]

Explanation:

Rate 42 after Jan 10; 100 left = 4,200; + 15,000 = 19,200 ÷ 400 = 48; 150 × 48 = 7,200.

3.  
Jan 1 opening 300 units @ ₹ 40; Jan 10 purchased 200 @ ₹ 45; Jan 15 issued 400; Jan 20 purchased 300 @ ₹ 50; Jan 28 issued 250. Closing stock at periodic weighted average is:

Correct Answer: D [₹ 6,750]

Explanation:

36,000 ÷ 800 = 45; 150 × 45 = 6,750.

4.  
Two-quantity comparisonJan 1 opening 300 units @ ₹ 40; Jan 10 purchased 200 @ ₹ 45; Jan 15 issued 400; Jan 20 purchased 300 @ ₹ 50; Jan 28 issued 250.
Quantity I: cost of goods issued under FIFO
Quantity II: cost of goods issued under moving average

Correct Answer: B [Quantity I < Quantity II]

Explanation:

QI = 16,500 + 12,000 = 28,500; QII = 16,800 + 12,000 = 28,800.

5.  
Closing stock of Year 1 was undervalued by ₹ 8,000 and closing stock of Year 2 was overvalued by ₹ 5,000. Reported profit of Year 2 is ₹ 70,000. The correct profit of Year 2 is:

Correct Answer: B [₹ 57,000]

Explanation:

Year 2 overstated by 8,000 (low opening) + 5,000 (high closing) = 13,000 → 57,000.

6.  
Goods are sold at 33⅓% above cost. Opening stock ₹ 70,000; purchases ₹ 2,90,000; sales up to the date of a fire ₹ 3,60,000; goods salvaged ₹ 12,500. Loss of stock by fire is:

Correct Answer: A [₹ 77,500]

Explanation:

33⅓% on cost = 25% on sales → COGS 2,70,000; stock 70,000 + 2,90,000 − 2,70,000 = 90,000; less salvage 12,500 = 77,500.

7.  
Statement-basedWhich of these are included in the cost of inventories under AS 2?
I. Freight inward II. Storage costs not needed in production III. Production overheads allocated on normal capacity IV. Selling commission

Correct Answer: C [I and III only]

Explanation:

II and IV are excluded by para 13.

8.  
Raw material cost ₹ 36,000, replacement cost ₹ 30,000. The finished product made from it costs ₹ 90,000 and will sell for only ₹ 80,000. The raw material is best valued at:

Correct Answer: C [₹ 30,000]

Explanation:

Finished product sells below cost → write down; replacement cost is the best measure (para 24).

➤ 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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