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Why Is Closing Stock valued at lower of ...

Why Is Closing Stock valued at lower of cost or net realisable value?

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Closing Stock is valued at lower of Cost or net realisable value because of the Prudence Concept of accounting
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Closing stock is valued at lower of cost or realisable value'. Which principle of Accounting is applied here?

According to Principle of Consevatism, closing stock is vlaue at Historical cost or net realisable value ( market value ) whichever is higher.

Knowledge Check

  • Closing stock in valued at

    A
    Cost
    B
    Market value
    C
    Net Realisable value
    D
    At Cost or net Realisable value, whichever is less.

  • Closing stock in valued at

    A
    Cost
    B
    Market value
    C
    Net Realisable value
    D
    At Cost or net Realisable value, whichever is less.

  • Stock is valued at

    A
    Cost or Net Realisable Value (Market Value), whichever is lower
    B
    cost or Net Realisable Value (Market Value), whichever is higher
    C
    Cost
    D
    Net Realisable Value (Market Value)

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    Why closing stock is valued at cost price or realisable value whichever is less?

    Stock is valued at

    Lower of cost or net relisable value is an example of

    Valuation of stock at lower of cost or net realisable value is an example of

    Closing stock in valued at Cost or Net Realisable value (Market Value) , whichever is less because of

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