Ms. sumita owner of a electronic shop has closing stock at a cash of rs. 500000 whose market value ( realised value is 400000). sumita recorded stock at cost of Rs. 500000.
Answers
Answered by
0
Answer:
she suffers loss of 10,000
make me as brain list bcoz it is correct answer bcoz market price is 10,000 less then she assumed
Answered by
0
Closing Stock is to be valued at ₹4,00,000.
Explanation:-
Ms. sumita owner of a electronic shop should record the closing stock at a cash of rs. 400000 (market value or realised value) instead of rs.500000.
As per CONSERVATISM PRINCIPLE OF ACCOUNTING, listed under UK GAAP:-
Accountant should always choose the “less favourable” outcome. This could mean minimising profits by recording estimated expenses or losses, and not recording the estimated gains or revenues.
Thus, the realised market value of stock is less than the recorded value, it means it is a future loss or expense, thus have to be considered and leaving with us the value of closing stock as ₹4,00,000.
Similar questions