Day: May 5, 2019

The value of a firm’s stock at the end of an accounting period is found by?

Select ONE answer:

1. stocktaking.
2. looking in the stock account in the nominal (general) ledger.
3. deducting the total of the firm’s purchases from that of its sales.
4. deducting the firm’s cost of, sales from the total of its sales.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct – Stocktaking means counting the quantity of each item in stock, valuing each item individually and adding all of the individual values together to get the total value of stock.
2. There isn‘t a stock account in the nominal (general) ledger.
3. Sales – Purchases is not equal to stock.
4. Sales – Cost of Sales = Gross Profit (not the value of stock).

 

This work is licensed under a Creative Commons Attribution 4.0 International License.