Question

Closing stock should be valued at market price or cost price ??

Answer 1

Closing stock is the goods that remain unsold at the end of the year. It is valued at Cost price or Market price, whichever is less.

It is based on the principle of Conservatism or prudence, According to which all anticipated losses should be recorded in the books of accounts, but all anticipated or unrealized gains should be ignored.

Answer 2

Cost price because closing stock was recorded in journal as per historical cost