in which method stock is valued at a price which is almost nearer to current market price?
Answers
Answer:
As ending inventory consists of recently purchased goods, closing stock valuation becomes almost equal to current market price.
Explanation:
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Answer:
The correct answer to this question is relative stock valuation.
Explanation:
Given - A price which is almost nearer to the current market price.
To Find - In which method stock is valued at a price that is almost nearer to the current market price?
The main financial ratios of comparable firms are calculated using the relative stock valuation approach, and the target company's key financial ratio is then derived. The examination of similar firms provides the greatest illustration of relative stock valuation. According to the accounting concept of conservatism, the closing stock is valued at the lower of its cost price or its market price.
Both the receipts and the issues will be valued at the standard price, which is the fixed price.
As a result, neither the cost price nor the market price applies to this pricing. Businesses that use the conventional costing methodology of accounting employ this strategy.
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