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Profit and loss account

P. gilbert guna seelan (Inspector) (28 Points)

27 July 2011  

The increase/decrease stock in trade is reflected in the income/expenditure. I may please be enlightended as to how it is a profit loss or increase decrease.  


 3 Replies

nimish solanki (IPCC CLEARED) (108 Points)
Replied 28 July 2011

INCREASE in stock being sales remaining d same would mean less goods sold for same amt. 

and vice versa

Aparna Raja K.C (Student) (520 Points)
Replied 03 August 2011

When Closing Stock Increases..

gross profit increases and it will increase the net profit... and vice versa...

Say.. Sales was 600,000. and closing stock was 4,00,000.. and opening stock + purchases was 3,00,000.

then gross profit  = 7,00,000...

else if closing stock was 500,000...other items remaing the same....

gross profit = 8,00,000


 

1 Like

Harsha (Article assistant) (23 Points)
Replied 16 March 2014

As per my opinion, increase in stock means there is increase in purchases, so it is to be treated as an expenditure.

increse in stok=closingstock-openingstock


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