Question

if the market value of closing inventary is less than its cost price inventary will he shown at

Answer 1

Inventory will be valued at Cost or Net Realisable Value whichever is less.

In this question, since market value(NRV) is less than cost, inventory will be valued at MARKET VALUE.

Answer 2

When the markert value of closing inventary is less than the opening inventary it means that the business has undergone loss and its effect will be shown at the credit side of the book of entry.

This shows that on that financial year the business recorded loss and the amount of the loss that was incuured should be quoted for proper accountability of income.