What will the treatment of Opening Stock, Adjusted Purchase, Purchase Return and closing stock, if all these items are given in Trial Balance? Please help me out.
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Adjusted purchases
Replies (6)
It means Gross profit is computed already and purchases got adjusted with stock in hand
No
adjusted purchases = Opening Stock + Net Purchases - Closing stock
there is an error in the question. usually closing stock will not covered under trail balance. why because closing stock is an account balance.
but closing stock will exist in trail balance along with either cost of goods sold or adjusted purchases.
Vinod ji, do you want to say that no trading account will be prepared in this case.
Satishji, thanks for the reply. But my query is still there that how trading account will be prepared?
gross profit = sales- cost of goods sold
= sales - (opening stock + purchases + direct purchases - closing stock)
= sales - ( adjusted purchases + direct purchases)
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