What is the difference between gross stock and net stock?

• A. Gross stock is the value of all stock on hand; net stock is the value after depreciation.
• B. Gross stock and net stock are the same.
• C. Gross stock is total units on hand; net stock excludes items set aside for safety, quality holds, or damaged stock.
• D. Gross stock refers to in-transit stock only.

Answer: (C)

Gross stock covers every unit physically present in the store, regardless of status. Net stock is what remains usable and available for issue after removing items that are not fit for use, such as those reserved as safety stock, held for quality checks, or damaged. This distinction matters because you need the net stock figure to know how much is actually available to meet demand, while gross stock gives a picture of total on-hand capacity. For example, if 1,500 units are on hand but 100 are reserved as safety stock, 40 are awaiting quality checks, and 60 are damaged, the net stock ready for issue is 1,300.