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| This query is : Resolved
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Ruksana
( Author )
15 June 2012
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I am confused with 2 heads in statement of profit and loss... what is the difference b/w 2 heads namely cost of material consumed and Purchases of stock in trade.. In which head I have to show purchases in case of trading concerns..
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Kishore B
( Expert )
15 June 2012
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Show under "Purchases of Stock in trade"
The other one is applicable mostly for a entity in manufacturing or in similar activity.
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CA CS Amit S. Kedia
( Expert )
16 June 2012
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If it is the case of trading concern then the head " Cost of materail consumed" is not applicable to you. You will just have to show purchase of goods under "purchase of Stock in trade".
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Ruksana
( Author )
18 June 2012
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Thanks....
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Ruksana
( Author )
18 June 2012
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Then where we have to show Opening stock, Direct expenses and closing stock?
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CA CS Amit S. Kedia
( Expert )
18 June 2012
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Direct expense will be booked under direct expense only and one more item will be there called " Increse/Decrease in Stock in trade".
both of them will be separate line items in P&L Statement.
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