Question

closing stock is shown outside in trail balance if statements are true or false​

Answer 1

Answer:

It is false

The reason why closing stock is not shown in trial balance takes into consideration whether or not closing stock has been adjusted with purchases or not. It is important to understand and endure so that a correct trial balance is prepared and the ledger balances are accurately checked.

It is usually shown as an additional information or an adjustment outside the trial balance.

Reason

Closing stock is the leftover balance out of goods which were purchased during an accounting period. Total purchases are already included in the trial balance, Hence closing stock should not be included in the trial balance again. If it is included, the effect will be doubled.

Suppose total purchases during an accounting period inside a Trial Balance are: 10,000

Closing Stock: 2,000 (This is included in purchases already)

If both of these figures are shown in trial balance then there will be a mismatch of 2,000 because the effect has now been doubled in the trial balance.

Also, No separate account is opened for closing stock inside the general ledger. Hence, closing stock is not to be shown in the trial balance.