Dear,
opening stck suggest previous year cls stk, hence as per genrl accepted acc principl
for sale of goods we use fifo method so open stk goods has been alrady sold or say consumed
hence Cost of goods sold = Opn +purch- cls stk , its shows that opn stk alrady consumed/sold ,while deducting of cls stk suggst its still not used for sale. So, COGS givn in t.b means all these 3 things came, therefore clos stk now will show in balance sheet asset side.its shows 2 effect that is one alrady in COGS & Asset side.hope this will help u.
 Originally posted by : abhishek |
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Because COGS=op.stock+purchases-cl.stock and therefore it gets combined in it. And does not come in trial bal. |  |
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