Main TopicsWhich principle implies when the closing stock is valued at the cost or market value whichever is less creating provisions for doubtful debts or writing of the intangible assets etc in the books of account?
Table of Contents
- Which principle implies when the closing stock is valued at the cost or market value whichever is less creating provisions for doubtful debts or writing of the intangible assets etc in the books of account?
- Which is greater market price or cost price?
- Under which accounting principle closing stock is valued at lower of cost or market value?
- In which method stock is valued at price which is almost nearer to current market price?
- Is price and cost the same?
- Is selling price and MRP same?
- At what price should the closing stock be valued?
- Which is more important, cost or market value?
- What should be the cost market price of a stock?
- Which is correct cost or market value whichever is loss?
- How is the cost of closing stock valued?
Which principle implies when the closing stock is valued at the cost or market value whichever is less creating provisions for doubtful debts or writing of the intangible assets etc in the books of account?
PRINCIPLE OF CONSERVATION / PRUDENCE IS APPLIED TO: VALUATION OF CLOSING STOCK AT COST OR MARKET PRICE WHICHEVER IS LESS. CREATION OF PROVISION FOR DOUBTFUL DEBT WRITING OFF INTANGIBLE ASSETS LIKE GOODWILL ,PATENT, TRADEMARK ETC.
Which is greater market price or cost price?
cost price of a particular product or commodity is the amount of expenditure incurred to either purchase that particular product or manufacture that particular product. ... Market price is the current price of a particular commodity. It may be more or less than the cost price.
Under which accounting principle closing stock is valued at lower of cost or market value?
Yes , the correct answer is option B because according to this principle do not anticipate profit but provide for all possible losses.So closing stock is always valued at lower of cost or NRV. This discussion on Closing stock is valued at lower of cost or market price.
In which method stock is valued at price which is almost nearer to current market price?
As ending inventory consists of recently purchased goods, closing stock valuation becomes almost equal to current market price.
Is price and cost the same?
The cost of a product can influence its price. ... For example, if a company generates $1 million of sales from its established product prices, and it incurs $800,000 of costs, then its profit is $200,000.
Is selling price and MRP same?
It is the price at which a product was made available to a retailer by the manufacturer. Therefore, it is the lowest price at which the retailer can sell the product. ... MRP is the maximum retail price. It is the maximum price at which the product can be sold to the customer and it is inclusive of all taxes.
At what price should the closing stock be valued?
Closing stock is valued at cost price or market price whichever is less.
Which is more important, cost or market value?
Cost or market value whichever is less: This is general method of stock valuation. In method of stock valuation usually we write 'cost' and we have to consider 'cost' and not 'actual cost' or 'cost of acquisition'. Therefore, 'cost' for the year is relevant and not cost of any earlier year being 'actual cost' or historical cost.
What should be the cost market price of a stock?
As per the accounting standards, the valuation of the stock should be at the cost market price, whichever is less.
Which is correct cost or market value whichever is loss?
Cost for the year being 800 per pc. being lower should be adopted as value of stock as on 31.03.2006 under the method 'cost or market value whichever is less'. By this way there will be no booking of unrealized profit. Thus conservative theory and prudence both will be satisfied in preparation of the p & l account.
How is the cost of closing stock valued?
When closing stock is valued the market price and the cost price of closing stock is considered. Cost price is that price at which originally the goods were purchased and market price is that price which is prevailing right now in the market.
