Question:medium

Undervaluation of Opening Stock in Cost Accounts will lead to:

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$$\text{Opening Stock Valuation} \propto \text{Total Cost of Sales} \propto \frac{1}{\text{Net Profit}}$$ Because opening stock is a cost input, any undervaluation of opening stock will artificially increase your calculated profits.

Updated On: Jun 17, 2026

increase in costing profits
decrease in costing profits
no change in costing profits
creates abnormal loss

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The Correct Option is A

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Undervaluation of Opening Stock in Cost Accounts will lead to:

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The Correct Option is A

Solution and Explanation

Top Questions on Reconciliation of Cost

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