Clusing stock entires??????????
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
17 June 2011
Dear Experts,
I am teribally confuse about the closing stock entries passed in accounts. I have seen many small business houses entering closing stock amounts directly in a accounting software (i.e. without mainting any inventory records).
Can any body expalin me in detail how to account for clousing stocks in a proper way?
Thanks in advance.
I am teribally confuse about the closing stock entries passed in accounts. I have seen many small business houses entering closing stock amounts directly in a accounting software (i.e. without mainting any inventory records).
Can any body expalin me in detail how to account for clousing stocks in a proper way?
Thanks in advance.
17 June 2011
Debit:
Closing Stock a/c
Accounts representing assets are real accounts and show a debit balance. Since by recording the journal entry for bringing the value of closing stock into books, we are creating an asset by name "Closing Stock a/c" we debit that account.
[Closing Stock a/c – Real a/c – Debit what comes in.]
Credit:
There are three possible variations in the account to be credited for recording the value of closing stock.
i. Trading a/c
ii. Goods Consumed a/c
iii. Purchases a/c
The ledger account to be credited is dependent on which account is used to reflect the value of cost of goods sold as well as the time of recording the entry.
Closing Stock a/c
Accounts representing assets are real accounts and show a debit balance. Since by recording the journal entry for bringing the value of closing stock into books, we are creating an asset by name "Closing Stock a/c" we debit that account.
[Closing Stock a/c – Real a/c – Debit what comes in.]
Credit:
There are three possible variations in the account to be credited for recording the value of closing stock.
i. Trading a/c
ii. Goods Consumed a/c
iii. Purchases a/c
The ledger account to be credited is dependent on which account is used to reflect the value of cost of goods sold as well as the time of recording the entry.
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09 August 2011
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