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.
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Profit and loss account
Replies (3)
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
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