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.

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
Follow

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.

Message likes : 1 times

RAMESH KUMAR VERMA

RAMESH KUMAR VERMA (Expert)
Follow

09 August 2011 u can also put up any query in ca club india.........eminent experts will assist you......

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now