In a question two or three items may be presented and students have to apply this rule in each instance. They then have to total the individual items to reach inventory on hand. Should an item be valued at net realisable value then an entry recognising the write down of stock has to take place. In this case Inventory writedown results in an increase in expenses with the credit to Inventory reducing assets. Some students have difficulty with definitions.
Answers are usually inadequate rather than incorrect.
This is a common failing in responding to theory topics. The amount of space provided in the answer booklet and the mark allocation should be an adequate guide. The length of the reporting period must be stated. The entering of data from commercial documents in the correct journal, the totalling of those journals and the posting to the General and subsidiary ledger rounds off the major areas in the examination. Students must be wary of double counting the amount for discount.