A trader has an opening stock of 200 units at Rs 5, buys 300 units at Rs 5 and then 100 units at Rs 6. He sells 400 units. What is the value of closing stock under FIFO?
Answer and explanation
Correct answer: A. Rs 1,100
- Step 1: Under FIFO the earliest units are sold first, so the closing stock consists of the latest purchases.
- Step 2: Closing units = 200; their value at the latest cost = 1100.
Answer
Rs 1,100.
Practise more Inventory and Final Accounts.
Free questions with an explanation for every one, and full timed CA Foundation mock tests.