Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Financial Statements of a Company

Question:

What do you mean by Change in Inventories?

Options:

Difference between closing inventories and opening inventories, if Closing inventories are higher.

Difference between opening inventories and closing inventories, if opening inventories are higher.

Closing Inventories less Opening Inventories

Opening Inventories less Closing Inventories

Correct Answer:

Opening Inventories less Closing Inventories

Explanation:

Inventory change is the difference between the amount of last period's ending inventory and the amount of the current period's ending inventory.