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JAMB Principles of Accounts 2003 Question 23

Question 23

Stock Valuation

The stock valuation data is important because it enables management to

  1. A.separate debtors from creditors
  2. B.determine the cost of stock at the end of business
  3. C.determine the cost of stock at the beginning of business
  4. D.determine the total cost of goods purchased
Show the answer and explanation

Answer: B (determine the cost of stock at the end of business)

Explanation

Stock valuation gives the value of closing stock, which is needed to work out cost of sales and profit.