Year end adjustments - Stock Flashcards
What is stock valued at the lower of
Cost or estimated selling price less costs to complete and sell - NRV
What is the net realisable value?
Estimated selling price and costs to complete and sell
What is cost defined as?
Cost of purchase, conversion and bringing to location & condition
What is base cost and is it acceptable?
Assumes fixed unit number & no
If trader purchases 100 shirts to sell @ £1.50 each but now considers worth £1 and spends £10 on advertising sale what is NRV
100 x £1 less £10 = £90
Is stock valued net of VAT or inclusive?
Net
What is difference between returns in and out?
Returns in returned to trader out to supplier
What is accounts entry for discounts received?
Dr current liabilities Cr expenses
What is accounts entry for returns out?
Dr trade creditors Cr expenses
What is accounts entry for returns in?
Dr Sales Cr debtors
Where discount for quick payment how is VAT calc?
At max potential discount = purchase net of discount x 20%
What is the accounts entry for discounts allowed
Dr income Cr trade debtors
If £5 stock provision where would be contra be
Trading account reducing value of stock
What are 3 main factors in valuing WIP?
Date of measurement, volume & value of materials + direct costs/
