BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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According to the concept of conservation, the stock-in-trade is valued at:
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Cost Price
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Market Price
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Cost or Market which ever is higher
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Cost or Market which ever is lower
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Explanation:
Detailed explanation-1: -Therefore, the stock in trade is valued at the Market price or cost price whichever is lower.
Detailed explanation-2: -Closing stock is always valued at cost price or market price whichever is less. It is based on the principle of Conservatism.
Detailed explanation-3: -An asset that is undervalued is one that has a market price less than its perceived intrinsic value. Buying undervalued stock in order to take advantage of the gap between intrinsic and market value is known as value investing.
Detailed explanation-4: -"Stock should be valued at cost or market price, whichever is lower at the date of the balance sheet.
Detailed explanation-5: -Closing stock is always valued at market price.
There is 1 question to complete.