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Opening stock

Animish Kanhere (Student) (56 Points)

11 October 2015

Why does "Opening stock" appear in the trial balance which is made up of closing balances?

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9 Replies

CA Praful (CA Job) (21 Points)
Replied 11 October 2015

Opening stock appears in opening trial balance whereas closing stock appears in closing trial balance.

hari rama Chandran (amf) (1 Points)
Replied 11 October 2015

Opening stock is also a closing balance of stock

vignesh raghuraman (student) (75 Points)
Replied 12 October 2015

Opening stock is present in trialbalance bec in the beggi of every year u shall pass the opening journalentry and the closing stock is present out of trial bal means its not yet adujusted and such is adjusted in trading ac

JAINS (CFO) (23 Points)
Replied 12 October 2015

Closing stock is generally not part of Trial balance . If it is there , it means that consumption for the year is adjusted by a corresponding entry and the trial balance item for closing stock is only for balance sheet .Opening stock is there because this needs to be adjusted for current year consumption.

Ramanuj (Accountant.) (834 Points)
Replied 12 October 2015

Mr Jains is right answer
agress with you i understood clearly sir

Thanks Ramanuj

karan jit singh (Consultant) (1299 Points)
Replied 13 October 2015

Trial balance is the balances of all ledgers of the accounts at a partcular date. As purchase of last year which is unconsmed in last year have balances in opening . Adjusted with the stock appearing in same trial. And all relevant purchase and sale should b adjusted to compute closing balance. As trial balance should have your purchase or sale or it might be djusted in spl ac

Jishnu Surendran (Finance Manager) (312 Points)
Replied 13 October 2015

You shall know that closing stock is represented by two accounts : Opening Stock a/c, if closing stock contains last year carried forward goods and then Purchases a/c. If you understand the significance of Purchases a/c, your doubt will be eventually vanished.

For example, lets ignore opening stock :

You have this year purchased goods for an amount say, Rs. 25,000 and let us assume that there are no sales, then your trial balance will be showing an amount of Rs. 25,000 against Purchases a/c which is exactly your closing stock. If we improve the situation, lets say that you have withdrawn goods worth Rs. 5,000 for your personal use, then the entry will be :

Drawings a/c Dr. 5,000

To Purchases a/c 5,000

The balance of Purchases a/c that will be reflected on your trial balance will be Rs. 20,000 ( 25,000 - 5,000 ) which is exactly your closing stock. Thus closing stock is represented by or is contained in the Purchases a/c.