Closing Stock Homework Answers
Have you ever thought that stock taking would be a difficult task? Ask an accounting student. He will know the miniscule processes and all additions and subtractions involved. Calculation of stock value is a tiring topic as accountancy students will agree with me. For this very reason, homework sites that provide closing stock homework answers are always in demand.
Know your inventory
Closing stock and its valuation are applicable for every business concern. It is the amount of inventory that the unit has, at the end of an accounting period. It includes raw materials, finished goods and work-in-process. It represents the value of goods that company has in its hands on the date of accounts.
Importance of ascertaining closing stock
Every business is a running concern. There are any number of transactions related to purchase and sale every day. It is essential for companies to value their inventory at the end of a year.
- It helps them to know where they stand in terms of stock of items.
- Amount of raw materials to be bought in the next year will depend on actual stock of raw materials in hand.
- It helps in ascertaining how much of their products are in production process.
- Valuation of inventory is useful in fixing prices of product.
- The accounting method used to value inventory has a direct impact on balance sheet and income statements.
Why students are bogged down in closing stock homework answers
A lot of students are at loggerheads with stock valuation problems. They have a long list of worries regarding these assignments.
- Too many items:
A typical homework problem for closing stock valuation will have a huge number of transactions related to purchase and sales. Students need to arrange these date-wise and calculate value of inventory. The sheer volume puts off many students. There is no need to be frustrated about the volume. Once you get into groove, things will be easy.
- Lots of calculation:
Any accounting problem has to have lots of plus, minus and percentages. If you are not friendly with numbers, this is a let-down for you. The only way out of this dilemma is to befriend numbers. Let go of your fear for numbers and go ahead.
- Different methods of calculation:
There are many methods to calculate closing stock. To get your closing stock homework answers correct, you need to know all methods. Students get confused between the various methods. Learn properly and practise as much as you can.
These stumbling blacks as perceived by students are not invincible. With hard work and dedication, you can master them.
Methods of valuation of stock
As we discussed already, different valuation methods create hardship for students. Let us look at them.
- FIFO method:
FIFO or First In First Out method is based on the assumption that inventories which are bought first will be the ones to be sold first. This means the price of goods bought first will be attributed to goods sold first. Therefore closing inventory price will mean price of last bought inventory.
- LIFO method:
This method is also called Last In First Out method. This is based on assumption that stock which comes last will be sold first. Therefore, at the end of year what remains will be the old inventory. Closing stock value will be based on value of old stock.
- Weighted average cost method:
This method is mostly used in manufacturing concerns where stock coming in and going out are so much that it is impossible to differentiate between first and last. In this case, the way is to calculate an average of all items of stock in possession at the end of year. This method is an important area in closing stock homework answers since this requires lots of calculations.
- Retail inventory method:
In this method, inventory value is calculated on the basis of retail value of inventory. Here you first take the retail value of inventory that was originally in stock and subtract the total sales from it. This is multiplied by the dollar value to get closing stock value.
These valuations are based on cost for company. Most companies follow the LCM method which means â€˜Lower of Cost price or Market priceâ€™. After finding stock value in the above manner, if market value of stock plummets and is less than cost value, the books of company will show the market value.
Homework help websites to your rescue
Assignments related to stock valuation are onerous. Now there is no need to lose your sleep over it. There are many assignment help sites which cater to your every need. There are several benefits of approaching them.
Precision is the watchword of many sites. If you are finding an assignment highly taxing, hand it over to experts. You will get correct answers with proper detailing.
A good homework help site will always stick to deadlines. Many assignments will have strict dates of submission. So if you are short on time, better to reach out for online help.
- Practice options:
One of the basic factors required to get closing stock homework answers correct is to do lots of practice. These sites will have practice test papers to help you improve knowledge base. With lots of practice and reading, you can master the topic.
- Expert assistance:
Assignment help sites have experts working round the clock for them. Suppose you get a doubt in the middle of studies. You canâ€™t run to your professorâ€™s house for help. Look out for an online tutor. With a good site, you will be able to clear doubts at any hour of the day.
- Online tests and quizzes:
Many sites provide assistance for quiz and tests which you might face in your educational institution. With their help, you will get to crack even the tough exams.
As seen from above facts, valuation of stock is an important area of study for accounting students. It is an area which has lots of career options in corporates. Master closing stock homework answers and success will kiss your feet.