14 June 2011
i want to know whether import duty, custom clearance charges and inland haulage charges are to be included while valuing the closing stock where purchase are exclusive of import duty,custom charges and inland haulage charges in case of trading proprietorship firm. plz reply soon
15 June 2011
How is the Value of Closing Stock Ascertained?
• Physical Stock Closing stock is the stock/goods unsold at the end of the accounting period. The details relating to the physical stock would be readily available with the organisation only if the inventory records are being maintained by the organisation. In other cases the physical stock would have to be ascertained by stock taking.
• Stock Value There is no specific ledger account in financial accounting that would give us the information relating to the value of closing stock ready hand. The value of closing stock is available ready hand only if inventory records are being maintained that too from the inventory records.
The value of Closing Stock is ascertained by Physical Verification of Stock on the last day of the accounting period and its valuation at Cost or Market Price (Net Realisable Value) whichever is lesser
This is the most common method for valuing the closing stock.
The information relating to the value of closing stock is not regularly required by the organisation. It is however required at the end of the accounting period for the purpose of evaluation of the Cost of Goods Sold.