Why Closing Stock Not shown in Trial Balance?
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Answer / manna
closing stock = opening stock + purchase - sales
| Is This Answer Correct ? | 157 Yes | 55 No |
Answer / rahul bagga
The reason why closing stock is not taken into account in a
trial balance is because a trial balance is a balance of
all ledger account a given point in time.It records only
transactions which have a two way effect for EG:Purchases
where goods are bought against cash or credit and sales
where goods are sold against cash or credit..But closing
stock is not a transaction having a two way effect any
given point in time.It is only an indication of the goods
lying in the factory at the end of the year.It is therefore
showed below the trial balance and not in the trial
balance.However in order to derive at the exact gross
profit the closing stock is taken into consideration in the
trading account and also appears as an asset in the
balancesheet.
| Is This Answer Correct ? | 84 Yes | 11 No |
This is because it is a post trial balance adjustment
effected after the trial balance has been adjusted. the
adjustment entry is as follows
DR Stock
CR Income Statement
The debit balance for stock is what appears in the balance
sheet.
The credit balance to the income statement is effectively a
deduction from cost of sales, since unsold stock is not part
of cost of sales for the period
| Is This Answer Correct ? | 77 Yes | 26 No |
Answer / udai
b,couse closing stock is a part of purchase as we allready
debited the purchase a/c
| Is This Answer Correct ? | 45 Yes | 10 No |
Answer / rohit ahuja
Because Trial Balance is a balance of all the ledger
account on partiuclar time, but stock is not a ledger.
Furhter we can also show closing stock in trial balance but
in this case purchases needed to be adjusted as follows: -
Purchases + Opening Stock - Closing Stock. In this case
Closing Stock will be apeared in Trial Balance & while
preparing Final Accounts it will be shown in Balance Sheet
only, it will not be shown in Trading Account.
| Is This Answer Correct ? | 31 Yes | 8 No |
Answer / chandra shekhar
To understand this we need to understand first what is
trial balance? A Trial Balance is a statement of ledger
account balances and closing stock is not a ledger
anymore. For example when we purchase something we pass
journal entry “ Purchase A/c Debit” not stock A/c
Debit. We never make a ledger in the name of “closing
stock”. Closing Stock = Opening Stock + Purchases – Sales.
| Is This Answer Correct ? | 15 Yes | 3 No |
Answer / naveen gupta
sotck's effect already reflect in Purchase and Sales
that's why it will not shown in trail balance, it just only
for movement of stock in factory.
| Is This Answer Correct ? | 12 Yes | 2 No |
Answer / amir
because the closing stock value already debited(included) with Purchase account or with opening stock,if we are taking the closing stock value again to trial balance ,it will have a double effect.if you want to show the closing stock in trial balance,you must be credit(reduce)the same with purchase account.
| Is This Answer Correct ? | 8 Yes | 2 No |
Answer / yatin
WE CAN SHOW CLOSING STOCK IN TRIAL BALANCE BY DOING
ADJ.ENTRY CLOSING STOCK A/C DR.
TO PURCHASE A/C
WE WANTED TO DO THIS BECAUSE BEFORE THAT ENTRY THERE IS NO
TRANSICTION WICH EFFECT CLOSING A/C.IF WE DO SO WE WILL NOT
SHOW CLOSING A/C IN TRAING A/C BECAUSE IT IS ALREADY
DEDUCTING FROM PURCHASE A/C.
BUT NORMALLY WE DO NOT DO ABOVE PROCESS
| Is This Answer Correct ? | 6 Yes | 2 No |
Answer / mann
there is a rule of accounting there is a duable effact of any entery one a/c is Dr and other is Cr..
when it come to closing stock.
closing stock = opening stock + pur. - sales.
there is no entery of closing stock in jounral. ño acount is prepar..for closing stock.
stock in store will be calculated at the end. when whole trial balance will be made..
so it will be shown at the end of the trial balance as an note....
| Is This Answer Correct ? | 5 Yes | 2 No |
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