Question

7.
Why is it necessary to write adjustment entry at the end of the year for closing stock ?
(A) To rectify the error
(B) To find true profit or loss
(C) To close the account
(D) To transfer the account​

Answer 1

Answer:

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 Openings