why closing balance do not come in trial balance?if it is
in which case it comes?
Answers were Sorted based on User's Feedback
Answer / rajesh
The trial balance is the summery of the varrious accounts
balances, while the Closing is not a balance but evaluate
for getting actual position of the year, Hence the closing
balance is not consider into trial balance . Whille for
information we can give seperate line in bottom of the
trial blalance.
Is This Answer Correct ? | 19 Yes | 1 No |
Answer / kuntal ghosh
Closing Stock does not appear in a Trial Balance simply
because it is already included either in the figure of
"Opening Stock" or in "Purchase"(depending upon stock
clearance method like FIFO,LIFO used)or in both.As both of
these items appear in Trial Balance as Dr. items,therefore
Closing Stock can not be shown again as a Dr. balance in
Trial Balance because then it will be double
counting.However,in case of Trading Account it can be shown
as it appears as Cr. item.Cost of goods sold can be derived
from these three figures with the following method:
Cost of Goods Sold = Opening Stock + Purchase - Closing Stock
Is This Answer Correct ? | 15 Yes | 4 No |
Answer / rajesh
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.In some case the closing stock appears as an adjusted purchase account in the trial balance and in this case it does not appear in the trading account but appears only in the balance sheet.
Is This Answer Correct ? | 12 Yes | 3 No |
Answer / jaykumar
the closing balance is not come because in T.B opening
stock balance A\C will shown on the debit side in T.B
& current year purchases will shown in dr side and credit
side current sales will shown that way not shown in trial
balance
Is This Answer Correct ? | 15 Yes | 9 No |
Answer / adityarajsehgal
coz tb is nt the final picture which reflects the position
of a firm.it is the b/s .
Is This Answer Correct ? | 4 Yes | 13 No |
HI i have been shortlisted for the Syndicate bank PO post. Can any one guide me about the interview questions..and answers?
Expand L T C
expand I R D A
Expand----------ACBD
how to prepare mba finance for interview questions
what are the types of leasing and their accounting entries?
Define depreciation
A company maintains a margin of safety of 25% on its current sales and earns a profit of Rs. 30 lakhs per annum. If the company has a profit volume (P/V) ratio of 40%, its current sales amount to A. Rs. 200 lakhs; B. Rs. 300 lakhs; C. Rs. 325 lakhs; D. None of the above.
Supposed we raised the Bill to the party last year. Next year party refused to pay the bill. Now I want write off the ledger of that party. How i make journal entry?
hi.. inthe month of june our expenses 540.petty cash replenishment we received 530. in the next month we received the balance 10 and july petty cash replenishment for 450 + 10. how to prepare jv. eg: subry expenses a/c 540 to cash 530 to ???? 10 july: sundry expenses 450 ??????????????? 10 to cash 460 pls help
Expand H U F
What is the New GL concept? how do you configure new GL a/c?