As-2 on Valuation of Inventories Homework Help

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As-2 on Valuation of Inventories Assignment Help

Here Is the Definition and Objectives of Inventory Evaluation as per the as 2 Standards

Inventory is the term that is given to stock in trade or stock of a particular company. From the perspective of trading, inventory refers to those goods that are meant for resale or goods that are still not sold. If you have a manufacturing firm then semi-finished goods, raw materials, and finished goods are also included in the inventory.

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Issues that arise

According to AS 2 inventories are tangible properties that are meant for sale, are in the process of creation for sale or are meant for ingestion in the production of services or goods for sale. Inventory valuation is mostly done at the end of each financial year. This is done in order to get an understanding of the performance of a particular organization.

Inventory valuation is normally based on either the market price or cost price whichever is lower.In order to make comparative evaluation meaningful, it is very important for the valuation of stock to be consistent over a certain period of time.

A number of times it has been observed that students of Accounts face a lot of problems in doing their assignments. It is for this reason that we would ask them to take AS-2 on valuation of inventories homework help from us. We always ensure that we make these assignments, keeping in mind all the necessary guidelines.

Why according to AS2 is it important to get inventory evaluated?

  • Helps in determining trading profit

In order to find out gross profit or trading profit, it is important to evaluate the inventory cost of a particular company. Gross profit is the revenue that a particular company earns with the help of excess sales over goods cost that have already been sold.

Cost of goods that are sold is basically purchases plus opening stock minus closing stock.Company stock value has an impact on the cost of the company, and it thereby affects the overall profit of the organization.

  • Helps in determining the company’s financial position

The company’s financial position depends on a lot on the company inventory. In the balance sheet closing stock is taken as acurrent asset. In case the stock is overvalued or undervalued it will give a wrong picture about company’s financial position.

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