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Why we show always closing stock in credit?
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Answer Posted / h.r. sreepada bhagi
The statement that Closing Stock is always shown in Credit
is wrong.
1. In the Trial Balance - Closing Stock is not shown ; Only
Opening Stock appears.
2. In the Balance Sheet - Closing Stock is shown on the
Assets side (Debit)
3. In Trading, Profit & Loss A/c it is shown on the Income
side so as to arrive at the cost of goods sold. In the
vertical form of P&L A/c Cost of Goods (Or Cost of materials
consumed or both) sold is calculated by Adding Opening Stock
to Purchases and subtracting Closing Stock. On the same
principle, it is shown on the right hand side (Income or
Credit side) of the P&L A/c.
| Is This Answer Correct ? | 4 Yes | 9 No |
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