Find the value of opening stock from the following data. Purchases 1,50,000, Closing stock 30,000 Sales 2,20,000, Gross profit 40,000.
Correct answer: C. 60,000
- A. 50,000
- B. 55,000
- C. 60,000
- D. 65,000
Explanation
Cost of goods sold is sales less gross profit, or 220,000 minus 40,000 = 180,000. Since opening stock + purchases minus closing stock equals cost of goods sold, opening stock is 180,000 minus 150,000 plus 30,000 = 60,000.
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About Financial Statements
Financial statements present a business's financial performance and position through the income statement, statement of financial position, cash flow statement and changes in equity. Questions involve preparing and interpreting these statements, adjusting entries, depreciation, closing inventory, accrued and prepaid items, and distinguishing profit from cash flow.
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