Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Financial Statements of a Company

Question:

Closing stock appears under which of the following financial statements?

Options:

Balance Sheet

Profit and Loss A/c

Both 1 and 2

Neither 1 nor 2

Correct Answer:

Balance Sheet

Explanation:

As per IAS 2, the Closing stock is valued at cost or market value whichever is lower. The value of closing stock is shown on the credit side of a Trading Account and the asset side of a Balance Sheet. The stock is current asset of the company.