PRC-1 · Chapter 10 · Question 45 of 100
When preparing final accounts, the value of Closing Inventory is typically extracted from:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) A physical stock count and valuation outside the main trial balance (under a periodic system).
Explanation
In a periodic inventory system, the closing inventory is not a running ledger account. It is determined by a physical count at year-end and is introduced via an adjusting entry (Debit Inventory, Credit Cost of Sales/Trading Account).
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