Explain how closing stock is treated in final accounts?

1.	Explain how closing stock is treated in final accounts?
Answer» The unsold goods in the business at the end of the accounting period are termed as closing stock. As per As-2 (Revised), the stock is valued at cost price or net realisable value, whichever is lower. Presentation in final accounts: 1. In the trading account: Shown on the credit side. 2. In the balance sheet: Shown on the assets side under current assets.

Answer»

The unsold goods in the business at the end of the accounting period are termed as closing stock. As per As-2 (Revised), the stock is valued at cost price or net realisable value, whichever is lower.

Presentation in final accounts:

1. In the trading account: Shown on the credit side.

2. In the balance sheet: Shown on the assets side under current assets.

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Explain how closing stock is treated in final accounts?

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