Weather Closing Stock appears in Trial Balance. If not why
and if yes how.
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Answer Posted / bhargavi
There is possibility of appearing closing stock in trial
balance when the entry passed is
closing stock A/c dr
To purchases
The effect of above entry is te reduce the debit in
purchases account.The stock account then not entered in
trading a/c it will then appear in trial balance
generally it is passed as closing stock A/c dr
to trading A/c.
The basic principle is matching concept.since cost incurred
w.r.t to unsold stock should not appear in this year books
of account it is reduced from purchases or by crediting
trading a/c and shown as cost of next years by writing as
opening stock.
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