Which one of the following is correct ____________________.

The term 'Purchases' include the purchases of fixed assets for cash as well as on credit.

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The term 'Sales' include the sales of fixed assets for cash as well as on credit.

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The term 'Opening stock' means the goods lying unsold at the end of previous accounting period

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The term 'Closing Stock' means the goods lying unsold at the beginning of current accounting period.

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Solution

The correct option is C The term 'Opening stock' means the goods lying unsold at the end of previous accounting period
Opening stock is the stock as on the first accounting day of the business which is carried forward from the previous accounting year, available for sale in the new accounting year.
It represents as a part of 'Current Assets' of the business and is shown on Assets side.

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Similar questions

State which fo the following would result in inflow/outflow of Cash or Cash Equivalents:
(i) Purchase of Inventory for cash.
(ii) Purchase of goods on credit.
(iii) Sale of Goods costing Rs. 10,000 for Rs. 12,000 for cash.
(iv) Sale fo Goods on Credit.
(v) Purchase of a fixed asset by issue of shares.

Q. According to records of a firm which not keep its accounts on double entry systems, all sales were made on credit so as to realize a profit of 33.33% on sales proceeds. The stock of unsold goods at the beginning and at the end of the trading period were valued at Rs 21,000 and 18,000 respectively. Goods worth Rs 1,39,500 were purchased for resale during the period. The proprietor withdraw goods worth Rs 1,500 during accounting period for personal use. What were the total sales during the period?

Q. From the following information, calculate value of Opening Inventory:

Closing Inventory	=	₹ 68,000
Total Sales	=	₹ 4,80,000 (including Cash Sales ₹ 1,20,000)
Total Purchases	=	₹ 3,60,000 (including Credit Purchases ₹ 2,39,200)

Goods are sold at a profit of 25% on cost.

Assuming that the Debt-Equity Ratio is 2 : I, state, giving reasons, which of the following transactions would (I) Increase; (ii) Decrease; (ii.) Not alter the Debt-Equity Ratio :

(i) Issue of new shares (Preference/Equity) for Cash.

(ii) Issue of new shares (Preference/Equity) against purchase of fixed asset.

(iii) Buy-back of its own shares by a Company.

(iv) Issue of Debentures for Cash.

(v) Issue of Debentures against purchase of fixed asset.

(vi) Repayment of Long-term Borrowings.

(vii) Conversion of Debentures into Equity Shares/Preference Shares.

(viii) Sale of a fixed asset at par.

(ix) Sale of a fixed asset at profit.

(x) Sale of a fixed asset at loss.

(xi) Purchase of a fixed asset on a credit of 2 months.

(xii) Purchase of a fixed asset on long-term deferred payment basis.

(xiii) Issue of Bonus Shares.

Q. A trader maintains his books of accounts on Single Entry basis. His books of accounts show that his total purchases during the year were Rs. 90,000 of which he returned goods worth Rs. 10,000. His credit sales were Rs. 50,000 and cash sales were Rs. 80,000 of the total sales goods returned were Rs. 30,000. Closing stock is Rs. 12,000. He sells his goods at cost plus 33.33%. His opening stock is?

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