Question

Closing stock adjustment in valuation of goodwill

Answer 1

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Explanation: Closing Stock is recorded on the credit side (reflecting incomes) of Trading A/c. Now, when closing stock is under-valued it means Trading A/c will give lower gross profit and Profit and Loss A/c will give lower net profit.

Answer 2

Answer:

Explanation: Closing Stock is recorded on the credit side (reflecting incomes) of Trading A/c. Now, when closing stock is under-valued it means Trading A/c will give lower gross profit and Profit and Loss A/c will give lower net profit.

Explanation:

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