Financial Statements – I · Class 11 · CBSE · Commerce Accountancy
While preparing the Trading and Profit and Loss Account, Closing Stock is valued at:
Practice question from Financial Statements – I (Class 11 · CBSE · Commerce Accountancy), with the correct answer and a step-by-step solution.
medium · MCQ · Q-D642B5
While preparing the Trading and Profit and Loss Account, Closing Stock is valued at:
- A.Cost price only
- B.Net realisable value only
- C.Cost price or net realisable value (market value), whichever is higher
- D.Cost price or net realisable value (market value), whichever is lowerCorrect answer
Solution
According to Accounting Standard 2 (Valuation of Inventories) and the conservatism (prudence) concept, closing stock is valued at cost price or net realisable value, whichever is lower.
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