Accounting entry for disclose income/stock
Querist : Anonymous
To Liability
Stock Declared a/c Dr
To Profit & Loss A/c
--------------------
Since the excess stock declared will show more net profit; hence it will be automatically included in capital account at the end of the year.
Stock Declared a/c Dr
To Profit & Loss A/c
--------------------
Since the excess stock declared will show more net profit; hence it will be automatically included in capital account at the end of the year.
Thanks for discussion.
Please show all the accounting entires togetherwith effect thereon in profit and loss account.
The profit should increase with the value of stock declared.
In the method suggested by you; it will give double effect in capital account.
Two addition of a single income will not be possible as written by you -
"It is income of the firm or prop. and also an addition to the capital."
Cr.Profit & Loss A/c
to p/l a/c
Godness gracious. A simple issue is blown out of context.
With due respects to all in my opinion only CA. Tilak Raj has got the correct answer. Entry Should be Stock A/c and credit Capital A/c. That is the only solution.
At theend of the year closing stock will automaticaly show increased value after taking into consideration the stock declared. Credit effect has to be given to Capital A/c. only.
How on earth can we give effect to Stock a/c. dr and cr P/L?????
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