Question

Abnormal items included in closing stock should be ________.
A) Deducted from closing stock
B) Added to closing stock
C) Added to Sales
D) Deducted from sales​

Answer 1

Abnormal items included in closing stock should be deducted from closing stock.

Explanation:

Option A is the correct answer.

The value of closing stock helps one determine the number of units sold and thus determine the total revenue. When abnormal items are included in closing stock, they do not give a clear picture of units sold. So, they should be removed from the closing stock by deducting their value. Then closing stock value is deducted from opening stock value to arrive at the number of units sold, which helps in the calculation of total revenue.

Hence, deducted from closing stock is the solution.

Answer 2

Explanation:

Among the various options given in question statement the correct option is the first one.

All abnormal items appearing in the closing stock should be deducted from it.

This is because this will not give us the real value of sales and stocks for that particular day because of those abnormal values, rather such values should be filtered to get the actual figures