COST ACCOUNTING
INTRODUCTION TO COST ACCOUNTING
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
cost only
|
|
|
cost or market value whichever is lower
|
|
|
Neither cost nor market value
|
|
|
Higher market value
|
|
|
None of these
|
Detailed explanation-1: -The cost price is the price at which the products were originally purchased, whereas the market price is the price that is now in effect in the market.
Detailed explanation-2: -Closing stock is always valued at market price.
Detailed explanation-3: -There are two types of price viz. cost price and the market price. The cost price is the price at which you procure the stock while the market price is what the stock is currently quoting at in the current market.
Detailed explanation-4: -The most common way of valuing a stock is by calculating the price-to-earnings ratio. The P/E ratio is a valuation of a company’s stock price against the most recently reported earnings per share (EPS). Investors use the P/E ratio as a yardstick to measure a company’s stock value.
Detailed explanation-5: -Closing stock is valued at lower of cost or market price.