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Questions
Closing stock is always valued at market price. Justify for or against by citing two reasons.
Justify the following statement either for or against by giving two reasons for the statement.
Closing stock is always valued at market price.
Solution
Against:
Closing stock is always valued at cost price or market price whichever is less because (a) it is as per the principle of prudence, and (b) it avoids creation of secret reserves.
RELATED QUESTIONS
This principle states that accounting procedures and methods should remain consistent from one year to another.
This principle states that the financial statements should be prepared quickly at the end of the accounting period.
This principle is an exception to the principle of full disclosure.
Explain the principle of materiality.
Explain the principle of Timeliness.
"Principle of consistency is a modifying principle." Comment.
Name and explain the accounting convention which says record all anticipated losses but ignore all anticipated gains.
Explain the Principle of Prudence.
Explain the principle of industry practice.
Explain the accounting conventions.
