Question

Is opening stock a direct expense?
Is closing stock a direct income?

Answer 1

Answer:

In the trading account, the cost of goods sold is subtracted from net sales for the period to calculate gross profit. Only direct revenue and direct expenses are considered in it. ... Items included on the debit side are opening stock, purchases, and direct expenses and on the credit side are sales and closing stock.

Explanation:

Answer 2

Explanation:

Is opening stock a direct expense?

----> In the trading account, the cost of goods sold is subtracted from net sales for the period to calculate gross profit. Only direct revenue and direct expenses are considered in it. ... Items included on the debit side are opening stock, purchases, and direct expenses and on the credit side are sales and closing stock.

Is closing stock a direct income?

---->All direct expenses are recorded on the debit side of Trading Account and direct revenues are recorded on the credit side of Trading Account. Closing stock is also recorded on the credit side of Trading Account which is revenue side.

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