Will Opening Stock Apper in Trial balance on Specific Date

A/c entries 43245 views 10 replies

If Anybody ask you Strieght Question as

"Will Opening Stock Value  Appear in Trial Balance prepared on Any Specific Date?

means e.g : Trail Balance prepaired on 31.03.2009 with all Ledgers Closing Balances in that

will you consider Value of Opening Stock or Value of Closing Stock.

What is Perfect Answer as you are Accounting Expert or CA ?

From

Anil Kumar

ponnalaanil @ gmail.com

Thanks with regards....

Replies (10)

Definitely Closing stock for the previous year end will appear as an opening stock in the trial balance preapred on 31.3.09 because opening stock.i.e closing stock of previous year represents the amount of expense incurred durin the previous year the benefit of which will be realised in the current year..so current period i.e.31.3.09 tb will contain the value of opening stock as on 1.4.08 and closing stock of 31.3.09 will be shown as an adjustment in the final accounts and will appear as opening stock for the next financial year

Trial balance is a list of closing balances both revenue and capital in nature as on a particular date. Therefore logically trial balance should not contain opening stock in it. In that case 'consumption' has to appear in the trial balance. Now in case opening stock needs to be shown in trial balance then 'consumption' will be replaced by 'purchase' during the period.

Hope this is clear.

Opening Stock will always appear in the Trial balance.

opening stock would appear on the debit side of the trial balance.this opening stock is the previous years closing stock.

Yeah, opening stock will appear.

Why closing stock shown in trial balance ???

Closing Stock is the balance of unsold goods that are left from the purchases made during an accounting period. The value of total purchases is already included in the Trial Balance. If the closing stock is added to the Trial Balance, the effect will be doubled.

Hence, it will not reflect in the Trial Balance.

However, if closing stock is shown in the trial balance it means that the purchases are adjusted to the effect.

The closing stock is an asset, and it is shown in the trial balance after being adjusted against purchases to calculate the cost of goods sold and determine the accurate profit or loss of a business.

What will be the General entry for Opening stock if it will appear in trial balance.

Neither opening stock nor closing stock appears in trial balance. Since they are not accounts in the ledger. Trial balances consists only accounting balances of debit and credits only. Closing stock is an adjustment entry. 


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