Final accounts

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Querist : Anonymous

Querist : Anonymous (Querist)

28 November 2013 can anyone plz give me the reason why closing stock is taken in adjustment and not in trial balance for preparing final accounts???

Hitendra Jain

Hitendra Jain (Expert)
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28 November 2013 Trial Balance Reflects the balance at the end of the period.

Closing Stock is also a Closing Balance of Inventory account if maintain in accounting term.

To get Closing Stock Cost of Goods Sold / Consumed is required.

In TB We have the opening balance, purchase account and abnormal loss of stock.

Cost of Goods Sold / Consumed is not ascertained by accounting entries instead of the value of closing stock is the driven factor of cost of goods sold / consumed.

Valuation of Closing stock is based on assumption of its expected value of recovery if sold.

Due to these two facts closing stock is represented as adjustment.

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Nikhil Kaushik

Nikhil Kaushik (Expert)
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28 November 2013 good explanation Hitendra Bhai.

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Querist : Anonymous

Querist : Anonymous (Querist)

01 December 2013 thank u so much hitendra bhai.... now this querry is very much cleared .......

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