Question

Opening stock is:

• A. Goods ready for sale at the end of the accounting year
• B. Goods ready for sale at the beginning of the accounting year
• C. Goods purchased during the year
• D. Expense for the year

Answer 1

Answer:

B. Goods ready for sale at the beginning of the 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.