Identify the principle of accounting on the basis of which the stock of goods on hand is valued at cost - Accountancy - Introduction to Accounting

Question

Identify the principle of accounting on the basis of which the
stock of goods on hand is valued at cost or net realizable value
(market value) whichever less is

Shruti Mishra · Accepted Answer

Dear Student, The principal of accounting highlighted in the above
asked question is Prudence or Conservatism principal It says, "Do
not anticipate a profit but provide all possible losses"
Henceforth, closing stock is valued at lower of cost or net
realisable value or making the provision for doubtful debts and
discount on debtor in anticipation of actual bad debts and discount
Regards

Identify the principle of accounting on the basis of which the stock of goods on hand is valued at cost or net realizable value (market value) whichever less is.