What is meant by Increase and Decrease Stock itmes. What is the role of this in Balance Sheet & Profit & Loss Account. Why we take consideration for this. Please explain for this topic.
NANDURI RAVI SURYA NARAYANA MU (ACCOUNTANT) (194 Points)
21 March 2009What is meant by Increase and Decrease Stock itmes. What is the role of this in Balance Sheet & Profit & Loss Account. Why we take consideration for this. Please explain for this topic.
CA SUDIPTA SINHA
(Commerce Coaching- Accounts Cost FM)
(735 Points)
Replied 21 March 2009
if the closing stock is more than opening stock that is called increase in stock items. that means more funds have been blocked in stock.when the closing stock is less than the opening stock that is decrease in the stock items. that menas fund sblocjked in the opening stock has ben realised. so this is a part of current assets and shown in the assets side of balance sheet. this stock can be sold in the next year and when sold will generate revenue. hence its shown in the credit side of the trading and profit and loss a/c.
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