The value of a firm’s stock at the end of an accounting period is found by?
Select ONE answer:
- stocktaking.
- looking in the stock account in the nominal (general) ledger.
- deducting the total of the firm’s purchases from that of its sales.
- 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:
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This multiple choice question is suitable for Accounting KS5 classes.
The answer is 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.
- There isn‘t a stock account in the nominal (general) ledger.
- Sales – Purchases is not equal to stock.
- Sales – Cost of Sales = Gross Profit (not the value of stock).
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