In accounting terms, what constitutes the 'closing stock'? (1) Net Investment (2) Gross Investment-Capital Losses (3) Opening Stock-Capital Losses (4) Opening Stock + Net Investment - Capital Losses
(4) Opening Stock + Net Investment - Capital Losses Explanation: Closing stock refers to the goods remaining un-sold during the year. It includes finished products, raw materials, or work in progress and is deducted from the period's costs in the balance sheets. The amount of closing stock (properly valued) is used to arrive at the cost of goods sold in a periodic inventory system with the following calculation: Opening stock + Purchases - Closing stock = Cost of goods sold.