Closing stock is valued at: MCQ with Answer and Explanation

Question
Closing stock is valued at:
A. Cost Price or Market Value, whichever is higher
B. Cost Price or Market Value, whichever is lower
C. Cost Price
D. Market (Net Realizable) Value
Answer: Option B
Solution (By JKSSB Mock Tests)
Based on the principle of conservatism (prudence), inventory is valued at Cost or Net Realizable Value (Market Value), whichever is less.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Practice More Accountancy and Book Keeping Questions

Question #1
The term 'Current Cost Accounting' deals with:
A. Replacement cost
B. Opportunity cost
C. Sunk cost
D. Historical cost
Discuss
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Correct Answer: Option A

Explanation:
Current cost accounting values assets at their current replacement cost, not historical cost.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
A partner's current account will have a credit balance if:
A. His drawings exceed his share of profit
B. He has withdrawn all profits
C. Firm incurs loss
D. His share of profit and interest on capital exceed his drawings
Discuss
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Correct Answer: Option D

Explanation:
Current account credit balance indicates net amount owed by firm to partner, i.e., profits and interest etc. exceed drawings.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
A newly admitted partner acquires his share of profit from:
A. Profit and loss account
B. The firm directly
C. Outside parties
D. Old partners by way of sacrifice
Discuss
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Correct Answer: Option D

Explanation:
A new partner's share comes from the old partners who sacrifice a portion of their profit share.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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