Question

What do you understand by inventory valuation and explain the significance of inventory valuation.​

Answer 1

Answer:

Inventory valuation refers to the measurement of items in monetary value that make up the inventory.

Explanation:

Inventory valuation is done at the end of every financial year to calculate the cost of goods sold and the cost of the unsold inventory. This is crucial as the excess or shortage of inventory affects the production and profitability of a business.

Answer 2

Inventory valuation is the monetry amount associated with the goods in the inventory at the end of an accounting period. inventories are the largest current business assets. inventory valuation allows you to evaluate your cost of goods sold (COGS) and, ultimately, your profitability.