about closing stock

RAKESH (Almost CA) (2199 Points)

02 November 2008  

hi can i know why closing stock is recorded in trading a/c.closing stock has not been sold but we use to show as income . suppose the trading a/c. is prepared for the year ended 31/03/2008 and there is closing stock of rs. 50000 so the credit side of the trading a/c. is meant to record direct income wat why do we record closing stock as our income though we have not sold that stock as on 31/03/2008 . why it is realised when it has not been sold . As we all know that it will be sold in the next year but why do we record the future income in the current year as our income . please do help me on this concept