Question 1

Trading stock in Division 70 ITAA 97 may be considered as being 'on hand' when

Accepted Answer

A)  The taxpayer has physical possession of the stock 
B)  The taxpayer has ownership of the stock 
C)  The taxpayer has dispositive power over the stock 
D)  The taxpayer has access to the stock 
A)  The taxpayer has physical possession of the stock 
B)  The taxpayer has ownership of the stock 
C)  The taxpayer has dispositive power over the stock 
D)  The taxpayer has access to the stock

Question 2

Which of the following statements is true about the perpetual inventory system?

Accepted Answer

A)  The only way that the amount of inventory on hand can be ascertained is by performing a physical stock take 
B)  The cost of goods sold figure can be determined from the detailed and accurate inventory records 
C)  There is a no continuous record of how much inventory is on hand at any particular point in time. 
D)  The cost of goods sold figure cannot be determined from the detailed and accurate inventory records 
A)  The only way that the amount of inventory on hand can be ascertained is by performing a physical stock take 
B)  The cost of goods sold figure can be determined from the detailed and accurate inventory records 
C)  There is a no continuous record of how much inventory is on hand at any particular point in time. 
D)  The cost of goods sold figure cannot be determined from the detailed and accurate inventory records

Question 3

Which one of the following statements is true?

Accepted Answer

A)  Where trading stock is donated to a deductible gift recipient a deduction equivalent to the market value of the trading stock at the date if disposal is allowed 
B)  Where trading stock is disposed outside the ordinary course of business the taxpayer must include in his/her assessable income theof that stock at cost 
C)  Where a taxpayer takes stock for his/her own personal use, the taxpayer is required to include themarket value of that stock as at the date of transfer as part of the assessable income of the business 
D)  Any compensation received for the loss of stock is non assessable non-exempt income 
A)  Where trading stock is donated to a deductible gift recipient a deduction equivalent to the market value of the trading stock at the date if disposal is allowed 
B)  Where trading stock is disposed outside the ordinary course of business the taxpayer must include in his/her assessable income theof that stock at cost 
C)  Where a taxpayer takes stock for his/her own personal use, the taxpayer is required to include themarket value of that stock as at the date of transfer as part of the assessable income of the business 
D)  Any compensation received for the loss of stock is non assessable non-exempt income

Question 4

Respirico Pty Ltd produces a pharmaceutical product which is used to treat asthma and other breathing difficulties. The product has a life-span of 18 months and is not saleable in any form after it passes its use by date. At the end of the income year, Respirico Pty Ltd has the following amounts of the product on hand:
· 2,000 items, valued at costs @ $40 each, which are within 3 months of their use by date; and
· 1,000 items, valued at cost @ $40 each, which are past their use by date.
Based on past data about the quantities of this stock sold in the preceding years and also combined with industry experience, it is reasonably estimated that only 20% of the 2.000 items, that are within 3 months of their use by date, will be sold before they reach their use by date (after which they cannot be legally sold). What amount should Respirico Pty Ltd show for the closing stock on hand?

Accepted Answer

The 1,000 items past their use by date h

Question 5

Which of the following is not an example of trading stock?

Accepted Answer

A)  Shares to a share trader 
B)  Work in progress to a manufacturer 
C)  Tropical and freshwater fish held by an aquarium store for sale to customers 
D)  Standing or growing crops to a farmer 
A)  Shares to a share trader 
B)  Work in progress to a manufacturer 
C)  Tropical and freshwater fish held by an aquarium store for sale to customers 
D)  Standing or growing crops to a farmer

Trading stock in Division 70 ITAA 97 may be considered as being 'on hand' when

Which of the following statements is true about the perpetual inventory system?

Which one of the following statements is true?

Which of the following is not an example of trading stock?

The Australian Taxation System and the Tax Formula

Residency and Source of Income

Assessable Incomeincome Tax

Capital Gains Tax

Fringe Benefits Tax

General Deductions

Specific Deductions Andapplications Ofdeductibility

Capital Allowances

Taxation of Individuals

Taxation of Companies

Taxation of Partnerships, Joint Ventures, Trusts and Superannuation

Goods and Services Tax

Ethics, Tax Avoidance and Evasion

Filters

Exam 9: Tax Accounting and Trading Stock

Trading stock in Division 70 ITAA 97 may be considered as being 'on hand' when

Which of the following statements is true about the perpetual inventory system?

Which one of the following statements is true?

Which of the following is not an example of trading stock?

The Australian Taxation System and the Tax Formula

Residency and Source of Income

Assessable Incomeincome Tax

Capital Gains Tax

Fringe Benefits Tax

General Deductions

Specific Deductions Andapplications Ofdeductibility

Capital Allowances

Taxation of Individuals

Taxation of Companies

Taxation of Partnerships, Joint Ventures, Trusts and Superannuation

Goods and Services Tax

Ethics, Tax Avoidance and Evasion

Filters