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Total Marks 5
Starting Date Tuesday, December 02, 2014
Closing Date Friday, December 05, 2014
Status Open

Topic to be tested:

Financial Statements


Learning Objectives:

To develop an understanding regarding the treatment of elements of financial statements


Star Corporation runs a kitchen and cookware shop in Lahore. Company book-keeper has just extracted the year-end trial balance shown below. Note that the extracted trial balance includes the stock value at the start of the year; closing stock valuation is given after the extracted trial balance. The stock of goods for resale is valued by the business at the end of each financial year, and the valuation is subsequently entered into the book-keeping system, for the purposes of financial reporting.

Extracts of Trial balance of Star Corporation, as at 30 June 2013







Stock at 1 July 2012



Trading A/C (Cost of Goods Sold)

Shop Fittings




Value Added Tax




Shop Expenses




Additional Information: Stock at 30 June 2013 was valued at Rs. 72,000



1.     You are required to recognize the accounting treatment for each extracted trail balance item according to the given example highlighted with red color.

  1. Why value of stock at 30 June 2013 is reported as additional information rather than appearing in trial balance? Answer with logical reasoning.

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