JAMB Principles of Accounts 2007 Question 25

Question 25

Stock Valuation

Stock valuation is useful because it informs the sales department on the

  1. A.prices of the competing goods
  2. B.prices that will affect profitability
  3. C.number of goods to produce
  4. D.number of goods to sell.
Show the answer and explanation

Answer: B (prices that will affect profitability)

Explanation

Knowing the value of stock helps the firm set selling prices that give a profit.