Question

Closing stock is valued at lower cost or realizable value. Which principle of accounting is applied here?

(a). Matching principle
(b) Conservatism Principle
(c) Materiality principle
(d) Going concern

principle​

Answer 1

Answer:

Accounting is based on certain concepts and conventions. One of the convention 'conservatism " defines that firm should make a provision for all future losses while making the financial statement. On this concept only, stocks are valued at cost or market price whichever is lower.

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