>> April 21, 2008
Accounting is very interesting subject .Simplicity is not the feature of accounting . Different complex problems , you will face in the field of accounting . Today , I am telling you about valuation of stock .Because businessmen buy different stock at different time at different cost . But when we will show our closing stock , we will face this problem . There have many rates at which we charge our cost of closing stock but I am giving you solution of this problem very simply
Suppose Rajpura alcon company buys raw material of wire at different cost but we this company records closing stock of this raw material , this company can use first in first out method for calculation of closing stock . This method is also called fifo . It means that the stock which bought first , it sent for sale first so last stock cost will the rate for calculating closing stock. There is another method last in first out or average cost method . I always suggests businessmen and accountant to use average cost method for calculating closing stock.
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