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Basic tricks I need help me

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MPR Sanjay Kumar

3145 Points Posted on 25 January 2023

usually while preparing trading account it consists opening stock closing stock sales and purchases and some direct expenses and direct incomes..

My query : As per final accounts rules

1. it is must to show the closing stock balances is more than opening stock.?

2. purchases balance value must reduce compared to the sales balance value?

3. gross profit balance figure must increase compared to the sales value

it is mandatory as per rules could you please explain me if there is any details are not given by clients

only having net profit and sales information

plse explain me

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Quick Summary

This discussion clarifies common misconceptions about trading account preparation. It explains that closing stock should ideally be higher than opening stock for a healthy business, but there's no strict rule. Purchases don't need to be less than sales; their value is primarily offset by closing stock. Gross profit doesn't have to be higher than sales, as operating costs and impairments influence this figure. The advice also touches upon how to proceed when only net profit and sales figures are available from a client.