Explain the effect of closing stock on gross profit and net profit.
comment on the financial health of their business.
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Answer / rao
with out closing stock how we start business, becoz it's
assest and it shoul be in cr side of trading a/c,and if we
wouldnot take in trading a/c then gross profit is not
correct, and when we take g.p in cr side of p/l a/c the net
profit also not correct and net profit would differ in
balancesheet. So inthis way it effects in g.p and n.p.
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