Frazier Moran
10/03/2023 · Primary School
Explain why it is necessary to value a company's stocks at the end of each period and also why, in a manufacturing company, expense items such as factory rent, wages of direct operatives, power costs, etc. are included in the value of work in progress and finished goods stocks.
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Valuing stocks at the end of each period is vital for accurate financial reporting, performance measurement, and regulatory compliance. It helps investors make informed decisions. In manufacturing, including expenses like rent and wages in inventory valuation provides a complete cost of production, aligns with accounting principles, and aids in profitability analysis and financial planning.
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