Which one of the following is INCORRECT about closing stock?
A
It is added into current assets
B
It is deducted from Material available for use
C
It becomes opening stock of next year
D
It reduces the resources of business
Correct Answer: It reduces the resources of business
Closing stock does not reduce the resources of business. Closing stock is the amount of inventory that a business still has on hand at the end of a reporting period.