As per AS-2 valuation of inventories, inventories are assets 1. held for sale in the ordinary course of business. 2. held for sale in the special course of business. 3. in the process of production for such sale. 4. in the form of materials or supplies to be consumed in the production processor or in the rendering of services. 5. in the process of services for such sale. Select the correct answer:

The correct answer is: C. 1, 3 and 4

As per AS-2 valuation of inventories, inventories are assets:

1. Held for sale in the ordinary course of business. This includes finished goods, work in progress, and raw materials that are held for sale in the ordinary course of business.
2. In the process of production for such sale. This includes work in progress that is in the process of being produced for sale.
3. In the form of materials or supplies to be consumed in the production processor or in the rendering of services. This includes raw materials, consumables, and supplies that are used in the production process or in the rendering of services.

Option 2, “held for sale in the special course of business,” is not included in the definition of inventories as per AS-2. This is because inventories are assets that are held for sale in the ordinary course of business. Assets that are held for sale in a special course of business are not considered to be inventories.

Option 5, “in the process of services for such sale,” is also not included in the definition of inventories as per AS-2. This is because inventories are assets that are held for sale in the ordinary course of business. Assets that are in the process of being produced for sale in a special course of business are not considered to be inventories.