Question

16. The value of closing stock for the year ending 31.3.2020 was Rs 28000 why its market value as
Rs 26,000. The accountant recorded the stock as Rs 28,000. Is it correct in his action? If not so then which principle is not adhered to?​

Answer 1

Answer:

Closing stock always has a debit balance as it is an asset. Since the value of stock is overcast it has to be credited to cancel the amount of overcast.

Since the error is detected after preparation of final account profit and loss adjustment A/c will be debited.

Explanation:

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