Question

Y is closing stock taken in credit side of trading account?
And which, opening or closing stock is not shown in trial balance ? and why ?

Answer 1

1. Because after process of purchase and sale of goods,some stock is left and you cannot sell more goods than you have purchased.So some stock is left which is called closing stock and it is taken on credit side of trading account but the balance is debit.

2. While a new balance sheet is prepared only closing stock is shown in balance sheet because opening stock is already taken in trading account.
While in trial balance both stock can be shown.

Answer 2

Stock at the year end is recorded in the trading account and a closing entry is passed. And due to this closing entry, closing stock is credited in trading account. To show the Cost of goods sold which is Opening stock + Purchases - closing stock. ... All of the stock is either shown in purchases or opening stock.


Therefore, closing stock cannot appear in the trial balance because there is no such account. However, if closing stock and cost of goods sold are present in the trial balance, it means that the above entries have already been passed. Therefore, purchases and opening stock cannot appear in the trial balance.

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