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CBSE Class 11-commerce Answered

When closing stock, opening stock and cost of goods sold are given then why only opening stck is not recorded in the trial balance and all others are recorded?

Asked by jhakanishka480 | 05 Sep, 2019, 12:37: PM

Expert Answer

Following are the important points to remember:

Opening stock account which has a debit balance is recorded in the debit column of the trial balance.
However, closing stock is not recorded in the trial balance and is given as additional information below the trial balance. It shows the balance of unsold goods from the opening stock and purchases. In order to incorporate the closing stock in the books of account, debit the closing stock account and credit the Trading account by the amount of unsold stock at the end. In the balance sheet, closing stock appears as an asset on the assets side of the balance sheet.
On the other hand, if the closing stock is to appear in the trial balance, then it needs to be adjusted through purchases by debiting the closing stock and crediting the purchases account. Hence, closing stock is not shown on the credit side of the trading account. However, it appears as an asset on the asset side of the balance sheet.

Answered by Surabhi Gawade | 05 Sep, 2019, 02:22: PM

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