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Closing stock is valued at cost …

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Closing stock is valued at cost or net realizable value whichever is less.which principal of accounting is applied here?

Posted by Pallavi Singh Parmar 5 years ago

CBSE > Class 11 > Accountancy

1 answers

Yogita Ingle 5 years ago

Closing stock is the goods that remain unsold at the end of the year. It is valued at Cost price or Realisable Value, whichever is less.

It is based on the principle of Conservatism or prudence, According to which all anticipated losses should be recorded in the books of accounts, but all anticipated or unrealized gains should be ignored.

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