In Trading Account, closing stock is valued at: MCQ with Answer and Explanation

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In Trading Account, closing stock is valued at:

A. Market price or cost, whichever is higher

B. Cost only

C. Cost or net realizable value, whichever is lower

D. Market price only

Answer: Option C

Solution (By JKSSB Mock Tests)

As per the prudence concept and AS 2, closing stock is valued at cost or net realizable value, whichever is lower.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1

Provision for doubtful debts created at the year-end is debited to:

A. Trading Account

B. Suspense Account

C. Profit & Loss Account

D. Sundry Debtors Account

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Correct Answer: Option C

Explanation:
Creating a provision is an expected indirect loss based on conservatism, so it is charged to the Profit and Loss Account.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #2

The 'Impersonal Accounts' are further classified into:

A. Representative and Personal

B. Natural and Artificial

C. Real and Nominal

D. Current and Non-current

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Correct Answer: Option C

Explanation:
Impersonal accounts include real (assets) and nominal (expenses/losses, incomes/gains).

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #3

The 'Ind AS 24' on Related Party Disclosures requires disclosure of:

A. Only transactions with key management personnel

B. Only parent-subsidiary relationships

C. Only compensation of key management personnel

D. Relationships, transactions, and outstanding balances with related parties

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Correct Answer: Option D

Explanation:
Ind AS 24 requires disclosure of related party relationships, transactions, and balances.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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