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Why we show always closing stock in credit?
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Answer Posted / muhammad jahangir
"Matching Concept"
(expense compare with revenue)
according to matching concept we put the closing stock on
credit side of trading a/c.
only those
expenses which are related to earn the revenue are debited
to the trading & profit and loss account, so that we can
arrive at accurate profit$loss
purchase of raw material are recorded on debit side we need
to seprte the value of closing stock which does not match to
the revenue during year.
closing stock which is not utilized yet to earn revenue but
we use in future.so,put on credit side.....
| Is This Answer Correct ? | 15 Yes | 3 No |
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