Stock Valuation - Jamb Accounts - Principles of Accounts Past Questions and Answers

Question 21:

• JAMB 2009

Use the information below to answer questions
Jan. 1 Received 1,000 units at N10 each
Jan. 2 Received 2,000 units at N12 each
Jan. 3 Issued 1,500 units
Jan. 4 Received 1,000 units at N11 each
Jan. 5 Issued 1,000 units
What is the value of closing stock using simple average?

A. N11,500
B. N17,000
C. N16,500
D. N28,500

Question 22:

• JAMB 2009

Which of the following methods gives a conservative closing stock value during a period of rising prices?

A. LIFO
B. FIFO
C. Simple average
D. Periodic simple average

Question 23:

• JAMB 2010

If an organization maintains a periodic stock system, the stock quantities are?

A. Updated at the end of the accounting year
B. Not considered in the updating process
C. Updated continuously
D. Updated at the beginning of the accounting year

Question 24:

• JAMB 2010

If a company values its stock in the period of rising prices using LIFO method, there is a tendency for it to?

A. Have a higher cost of goods sold
B. Have a higher gross profit
C. Pay higher gross profit
D. Have a higher value for closing stock

Question 25:

• JAMB 2011

In a period of declining price, which of the following methods would result in higher profit?

A. FIFO
B. Simple average
C. LIFO
D. Weighted average