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Closing Stock Video Lecture - Commerce
FAQs on Closing Stock Video Lecture - Commerce
| 1. What is closing stock? |  |
Ans. Closing stock refers to the value of the remaining stock or inventory at the end of an accounting period. It represents the cost of unsold goods that a company still has on hand.
| 2. Why is closing stock important for businesses? | |
Ans. Closing stock is important for businesses as it helps in determining the cost of goods sold and calculating the accurate value of the remaining inventory. It is crucial for financial reporting, tax purposes, and analyzing the profitability of a business.
| 3. How is closing stock calculated? | |
Ans. Closing stock is calculated by adding the opening stock to the purchases made during the accounting period and subtracting the cost of goods sold. The resulting figure represents the value of the closing stock.
| 4. What are the different methods used to value closing stock? | |
Ans. There are several methods used to value closing stock, including the First-In-First-Out (FIFO) method, Last-In-First-Out (LIFO) method, and Weighted Average Cost method. These methods determine the cost of goods sold and the value of the remaining stock based on different assumptions.
| 5. How does closing stock affect a company's financial statements? | |
Ans. Closing stock affects a company's financial statements by impacting the cost of goods sold and the value of inventory. It directly affects the calculation of gross profit, net profit, and the overall financial position of the company. Proper valuation of closing stock is crucial for accurate financial reporting and analysis.
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Nov 08, 2024 Last updated |
Closing Stock for Commerce2024 is part of Commerce preparation. The notes and questions for Closing Stock
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