Profit and loss account

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

and vice versa

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

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