Aakash Kandoi CA Inter Question Bank PDF: Advanced Accounting Solved Questions

The visible pages cover AS 2 (Revised) Valuation of Inventories in Chapter 4. Illustration 1 values three products that are not interchangeable at the lower of cost and NRV item by item, giving closing stock of ₹76 lakhs against a cost of ₹88 lakhs. Illustration 2 works out NRV after a 10% selling commission. Illustrations 3 and 6 split total wastage into normal and abnormal loss. Normal loss is absorbed into the cost of good units, and abnormal loss is charged to the Statement of Profit and Loss. Illustration 4 builds the cost per kg by adding material, direct labour and variable overhead, then fixed production overhead absorbed on a normal capacity of 2 lakh kgs. Illustration 5 lists the costs excluded from inventory: abnormal waste, some storage costs, administrative overheads and selling and distribution costs. Illustration 7 begins a raw material and work-in-progress case that uses replacement cost. The solutions use clear tables and step-by-step calculations.

Inventories are valued at the lower of cost and net realisable value. The write-down is normally made item by item, not on the total, which is why Illustration 1 gives ₹76 lakhs and not ₹84 lakhs. NRV means the expected selling price less the costs needed to make the sale, such as agent's commission. For wastage, first work out normal loss as a percentage of input. The cost of input is then spread over the normal output quantity, and any excess loss is valued at that rate and expensed. Fixed production overheads are absorbed on normal capacity, not on actual output. Abnormal waste, storage costs not needed in production, administrative overheads that do not bring inventory to its present location and condition, and selling and distribution costs are kept out of inventory cost. In 5-mark answers, quote the relevant AS 2 provision before giving your calculation.

Read the AS 2 chapter in the ICAI study material first so the definitions and provisions are clear. Then attempt each illustration in this question bank on your own before checking the solution. Compare both the wording of the provision and the final figure. Give priority to questions tagged with MTP or RTP references, because they show how ICAI has framed this topic in recent attempts. After a chapter, solve the latest RTP and MTP for any new versions of the same idea. Then try past exam papers under timed conditions, giving about nine minutes to a 5-mark question. Keep a short sheet of formulas, such as cost per unit on normal output and NRV less selling costs. Use it again in the final week. Mark any illustration you got wrong and redo it after a few days.

This question bank is written for CA Inter students preparing Advanced Accounting. It is most useful once you have finished the concepts and want enough practice to handle accounting standard questions with confidence. It helps students who lose marks by valuing inventory on the total instead of item by item, or by mixing up normal and abnormal loss. Students giving the paper for the first time can use it alongside classes or self-study. Repeat candidates can use the MTP and RTP tagged questions for quick revision. The preview shows only Chapter 4 on AS 2, but the 494-page length points to a full-subject collection. Check the chapters inside the full PDF against the syllabus for your attempt, and confirm any recent changes using the ICAI study material.

• AS 2 (Revised) Valuation of Inventories
• Lower of cost and net realisable value
• Item-by-item valuation of closing stock
• Net realisable value after selling commission
• Normal and abnormal wastage
• Cost per unit on normal output
• Fixed production overhead on normal capacity
• Costs excluded from cost of inventories
• Replacement cost of raw materials
• MTP and RTP based illustrations

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