Question

2 effects of adjustment closing stock​

Answer 1

Answer:

1.Closing Stock is shown on the Credit Side of Trading Account.

2.Closing Stock is shown on the Asset Side of Balance Sheet.

But, sometimes in the Trial Balance, Adjusted Purchase is given and this means Opening Stock and Closing Stock are adjusted through purchases. Then both Adjusted Purchases A/c and Closing Stock Account appear in the Trial Balance.

Then, Adjusted Purchases amount may be taken to the debit side of Trading Account and Closing Stock appear on the Asset side of Balance Sheet. It should be noted that under this circumstance, Closing Stock will not appear in Trading Account. In the following year, the Closing Stock becomes Opening Stock.

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Answer 2

is an Intangible asset. *