UPSC Exam  >  UPSC Questions  >  Physical verification of stock in a business ... Start Learning for Free
Physical verification of stock in a business was done on 23rd June 2018 the value of the stock was rupees 48 lakh the following transaction took place between 23rd June to 13th June 2018 sales were 1360000 which includes goods worth rupees 320000 send on approval half of these goods were turn before 30th June 2018 but no information was available regarding the remaining goods goods are sold at cost plus 25% age however goods costing rupees 40000 has been solved for rupees 10000 why do we take 80 percentage 160000 for cost of goods and on approval basis?
Most Upvoted Answer
Physical verification of stock in a business was done on 23rd June 201...
Stock Valuation Overview
The physical verification of stock on 23rd June 2018 revealed a value of ₹48 lakh. Following this, several transactions took place impacting the stock valuation.
Sales Transactions
- Total sales amounted to ₹13,60,000.
- Included in this were goods worth ₹3,20,000 sold on an approval basis.
- Half of these goods were returned before 30th June 2018, while the status of the remaining goods is unknown.
Cost and Selling Price Analysis
- Goods are sold at a cost plus a 25% markup.
- Therefore, the selling price of goods costing ₹40,000 was incorrectly recorded at ₹10,000, indicating a potential loss or discounting issue.
Why Take 80% of ₹1,60,000 for Cost of Goods on Approval?
- The total goods sold on approval amounted to ₹3,20,000.
- Since half of these goods (i.e., ₹1,60,000) were returned, we consider the remaining ₹1,60,000 as the potential revenue from sales.
- The goods sold on approval are often treated cautiously until the approval is confirmed, hence why only 80% (₹1,60,000) is accounted for.
Conclusion
The approach of taking 80% for goods on approval reflects a conservative accounting method, ensuring that only the goods likely to be retained are factored into the overall stock valuation. This is crucial for providing an accurate financial picture for the business.
Explore Courses for UPSC exam

Similar UPSC Doubts

Top Courses for UPSC

Physical verification of stock in a business was done on 23rd June 2018 the value of the stock was rupees 48 lakh the following transaction took place between 23rd June to 13th June 2018 sales were 1360000 which includes goods worth rupees 320000 send on approval half of these goods were turn before 30th June 2018 but no information was available regarding the remaining goods goods are sold at cost plus 25% age however goods costing rupees 40000 has been solved for rupees 10000 why do we take 80 percentage 160000 for cost of goods and on approval basis?
Question Description
Physical verification of stock in a business was done on 23rd June 2018 the value of the stock was rupees 48 lakh the following transaction took place between 23rd June to 13th June 2018 sales were 1360000 which includes goods worth rupees 320000 send on approval half of these goods were turn before 30th June 2018 but no information was available regarding the remaining goods goods are sold at cost plus 25% age however goods costing rupees 40000 has been solved for rupees 10000 why do we take 80 percentage 160000 for cost of goods and on approval basis? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Physical verification of stock in a business was done on 23rd June 2018 the value of the stock was rupees 48 lakh the following transaction took place between 23rd June to 13th June 2018 sales were 1360000 which includes goods worth rupees 320000 send on approval half of these goods were turn before 30th June 2018 but no information was available regarding the remaining goods goods are sold at cost plus 25% age however goods costing rupees 40000 has been solved for rupees 10000 why do we take 80 percentage 160000 for cost of goods and on approval basis? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Physical verification of stock in a business was done on 23rd June 2018 the value of the stock was rupees 48 lakh the following transaction took place between 23rd June to 13th June 2018 sales were 1360000 which includes goods worth rupees 320000 send on approval half of these goods were turn before 30th June 2018 but no information was available regarding the remaining goods goods are sold at cost plus 25% age however goods costing rupees 40000 has been solved for rupees 10000 why do we take 80 percentage 160000 for cost of goods and on approval basis?.
Solutions for Physical verification of stock in a business was done on 23rd June 2018 the value of the stock was rupees 48 lakh the following transaction took place between 23rd June to 13th June 2018 sales were 1360000 which includes goods worth rupees 320000 send on approval half of these goods were turn before 30th June 2018 but no information was available regarding the remaining goods goods are sold at cost plus 25% age however goods costing rupees 40000 has been solved for rupees 10000 why do we take 80 percentage 160000 for cost of goods and on approval basis? in English & in Hindi are available as part of our courses for UPSC. Download more important topics, notes, lectures and mock test series for UPSC Exam by signing up for free.
Here you can find the meaning of Physical verification of stock in a business was done on 23rd June 2018 the value of the stock was rupees 48 lakh the following transaction took place between 23rd June to 13th June 2018 sales were 1360000 which includes goods worth rupees 320000 send on approval half of these goods were turn before 30th June 2018 but no information was available regarding the remaining goods goods are sold at cost plus 25% age however goods costing rupees 40000 has been solved for rupees 10000 why do we take 80 percentage 160000 for cost of goods and on approval basis? defined & explained in the simplest way possible. Besides giving the explanation of Physical verification of stock in a business was done on 23rd June 2018 the value of the stock was rupees 48 lakh the following transaction took place between 23rd June to 13th June 2018 sales were 1360000 which includes goods worth rupees 320000 send on approval half of these goods were turn before 30th June 2018 but no information was available regarding the remaining goods goods are sold at cost plus 25% age however goods costing rupees 40000 has been solved for rupees 10000 why do we take 80 percentage 160000 for cost of goods and on approval basis?, a detailed solution for Physical verification of stock in a business was done on 23rd June 2018 the value of the stock was rupees 48 lakh the following transaction took place between 23rd June to 13th June 2018 sales were 1360000 which includes goods worth rupees 320000 send on approval half of these goods were turn before 30th June 2018 but no information was available regarding the remaining goods goods are sold at cost plus 25% age however goods costing rupees 40000 has been solved for rupees 10000 why do we take 80 percentage 160000 for cost of goods and on approval basis? has been provided alongside types of Physical verification of stock in a business was done on 23rd June 2018 the value of the stock was rupees 48 lakh the following transaction took place between 23rd June to 13th June 2018 sales were 1360000 which includes goods worth rupees 320000 send on approval half of these goods were turn before 30th June 2018 but no information was available regarding the remaining goods goods are sold at cost plus 25% age however goods costing rupees 40000 has been solved for rupees 10000 why do we take 80 percentage 160000 for cost of goods and on approval basis? theory, EduRev gives you an ample number of questions to practice Physical verification of stock in a business was done on 23rd June 2018 the value of the stock was rupees 48 lakh the following transaction took place between 23rd June to 13th June 2018 sales were 1360000 which includes goods worth rupees 320000 send on approval half of these goods were turn before 30th June 2018 but no information was available regarding the remaining goods goods are sold at cost plus 25% age however goods costing rupees 40000 has been solved for rupees 10000 why do we take 80 percentage 160000 for cost of goods and on approval basis? tests, examples and also practice UPSC tests.
Explore Courses for UPSC exam

Top Courses for UPSC

Explore Courses
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
10M+ students study on EduRev