Question
In accounting terms, what constitutes the ‘closing stock’?
Answer: Option B
Answer: (b)
Closing stock refers to the goods remaining unsold during the year. It includes finished products, raw materials, or work in progress and is deducted from the period's costs in the balance sheets.
The amount of closing stock (properly valued) is used to arrive at the cost of goods sold in a periodic inventory system with the following calculation:
Opening stock + Purchases - Closing stock = Cost of goods sold.
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Answer: (b)
Closing stock refers to the goods remaining unsold during the year. It includes finished products, raw materials, or work in progress and is deducted from the period's costs in the balance sheets.
The amount of closing stock (properly valued) is used to arrive at the cost of goods sold in a periodic inventory system with the following calculation:
Opening stock + Purchases - Closing stock = Cost of goods sold.
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