Quiz 62: Costs Included in Inventory

Test your knowledge of double entry bookkeeping with our costs included in inventory quiz.

In order to correctly establish the cost of inventory to be shown on the balance sheet of a business it is first necessary to understand and identify which costs are required to bring the inventory to its present location and condition ready for sale.

Not Ready for the Quiz?

If you need a refresher course on the use of the costs to be included in inventory, take a look at our tutorial on the subject and our basics of bookkeeping tutorials.

Start the Costs Included in Inventory Quiz

Identify whether each of the following costs are included or excluded from the cost of inventory.
For each question click on an answer to reveal whether its Right! or Wrong.

1. Freight in?
Right!
Wrong

 

2. Freight out?
Wrong
Right!

 

3. Sales returns?
Wrong
Right!

 

4. Direct materials?
Right!
Wrong
5. Production overhead?
Right!
Wrong
6. Interest and finance costs?
Wrong
Right!
7. Transport costs to customers?
Wrong
Right!

 

8. Purchases discounts not taken?
Wrong
Right!
9. Direct labor?
Right!
Wrong
10. Cost of goods purchased for resale?
Right!
Wrong
11. Import duties?
Right!
Wrong
13. Selling costs?
Wrong
Right!
14. Administrative overhead?
Wrong
Right!
15. Storage during the production process?
Right!
Wrong

Try Another Double Entry Bookkeeping Quiz

This costs included in inventory quiz is one of many of our online quizzes which are used to test your knowledge of double entry bookkeeping, discover another at the links below.

Last modified July 16th, 2019 by Michael Brown

About the Author

Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and consultant for more than 25 years in all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a BSc from Loughborough University.

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