At the time of preparing Trial Balance, value of Opening Stock & current year closing stock should be calculated in Trial balance or not. And If there is a Loss in previous year how it would treated in Trial Balance.
Thanking You
Asit Panda
1 Replies
Vikas Gupta
(Tax Executive)
(530 Points)
Replied 03 July 2015
You have three options in this regard --
1. You may show opening stock at debit side and closing stock at credit side.
2. You may show 'Consumption' instead of showing opening/closing stock and purchases, where Consumption = Opening stock + Purchases during the year - Closing stock.
3. Since trial balance is summary of balances of ledgers and closing stock is not a ledger rather it is goods lying in the factory/godown, you should not show it in trial balance because it's not a ledger.
But to avoid any confusion, I'll suggest you to tally both sides of trial balance, show closing balance in cr side.
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