The 'Closing Stock' is valued on the basis of: MCQ with Answer and Explanation

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The 'Closing Stock' is valued on the basis of:

A. Cost or market price whichever is higher

B. Net realizable value only

C. Market price only

D. Cost or net realizable value whichever is lower

Answer: Option D

Solution (By JKSSB Mock Tests)

Prudence convention and AS 2 require lower of cost and NRV.

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

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Question #1

The 'Assembly of the Final Audit File' should be completed within:

A. 30 days of auditor's report

B. 60 days of auditor's report (as per SA 230)

C. 90 days

D. No time limit

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Correct Answer: Option B

Explanation:
The final file should be assembled within 60 days from the date of auditor's report.

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

Question #2

The 'Professional Skepticism' means:

A. Questioning mind and critical assessment of audit evidence

B. Ignoring evidence

C. Being cynical always

D. Believing management without question

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Correct Answer: Option A

Explanation:
Auditor must apply professional skepticism throughout the engagement.

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

Question #3

The Trading Account is prepared to ascertain:

A. Net Profit or Net Loss

B. Cash Flow

C. Gross Profit or Gross Loss

D. Financial Position

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Correct Answer: Option C

Explanation:
Trading account compares direct revenues (sales) with direct costs (purchases, direct expenses) to find the Gross Profit or Loss.

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

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