Question

In accounting, Stock refers to:

• A. Goods sold during the year
• B. Unsold goods at the end of an accounting year
• C. Goods purchased on credit
• D. Goods returned to the supplier

Answer 1

Answer:

B. Unsold goods at the end of an accounting year

STOCK:

• Stock means unsold goods.

• The value of goods remaining unsold at the end of an accounting year is known as closing stock.

• Closing stock in case of manufacturing concern consists of raw materials, work-in-progress and finished goods.

• Example: Purchased 20 shirts @ Rs. 1000 each Rs. 20,000. 50 15 shirts @ Rs. 1,200 each Rs.18,000. Closing Stock = 5 (20-15) Shirts @ Rs.1,000 each Rs.5,000

OPENING STOCK

• Opening stock is the value of goods which are ready for sale at the beginning of an accounting year.

• Last year's closing stock will be the opening stock of next year.