How to value the inventory of a firm for adjustments in the final accounts?

Ans : Stock is taken as the market value/ net realizable value or at its cost, whichever is less.

For instance, the closing stock is Rs. 2, 00, 000, however, the market value of the same is Rs.1,50,000. Therefore, the closing stock will then be recorded as Rs.1,50,000. This is a safety net to overcome anticipated losses that might occur soon.