37   Which TWO of the following will be classified as non-current assets for a dealer in computer equipment?

(1)  Computers for resale

(2)  Vehicles for delivering computers

(3)  Business capital

(4)  Office furniture

A    1 and 2

B    2 and 3

C    2 and 4

D    3 and 4

41   Which of the following statements regarding the method of consolidation is true?

(1)   Subsidiaries are consolidated in full

(2)   Associates are equity accounted

A     Neither statement

B    Statement 1 only

C     Both statements

D    Statement 2 only

42   Which of the following statements about the valuation of inventory is correct, according to IAS2 Inventories?

A     Inventory items are normally to be valued at the higher of cost and net realisable value

B    The cost of goods manufactured by an enterprise will include materials and labour only. Overhead costs cannot

be included

C     LIFO is an accepted valuation method for inventory. FIFO is not an accepted valuation method for inventory

D    Selling price less estimated profit margin may be used to arrive at cost if this gives a reasonable approximation

to actual cost

43   A company’s gross profit as a percentage of sales increased from 24% in the year ended 31 December 20X1 to 27%

in the year ended 31 December 20X2.

Which of the following events is most likely to have caused the increase?

A    An increase in sales volume

B    A purchase in December 20X1 mistakenly being recorded as happening in January 20X2

C    Overstatement of the closing inventory at 31 December 20X1

D     Understatement of the closing inventory at 31 December 20X1