Please Help: Final accounts
Posted Date : 11-Jul-2012 , 05:17:29 pm | Posted By Krishna Chandra Santi
What is the main reason behind posting of closing stock in P/L A/c?
Category : Accounts | Answers : 2 | Comments : 2 | Hits : 218
Answers
Answer By: CA Satuti Mahajan
Because the profit or loss/ operations of an organisation depends upon stock.
Answer By: CA. SURESH Kr. AGARWAL
Dear p/l a/c is a statement of business/organization activity. Hence the sales/purchase/opening stock/closing stock along with all income/expenditures are reflected in the profit and loss account to generate the outcome of the business.
Comments
Krishna Chandra Santi
12-Jul-2012 , 01:21:53 pmWhen the closing is in the trial balance , why it is posted in the balance sheet? I am waiting for an expert answer
CA ISHA MARFATIA
12-Jul-2012 , 10:07:02 pmWhere closing stock is shown in the trial balance that means that stock of goods is not used during that F.Y. and the same balance is c/f from the previous year. From the 2nd view it is not related to operations of the business during that particular year so we cannot include it in the operating statement of the business of the current year. In which year those goods were used and stock remained, the closing stock must had be mentioned the P&L A/C of that year. E.g. Material X of Rs.50000 had been purchased in the F.Y. 2010-11. Material of Rs. 40000 had been used in the same year and Stock remained of Rs. 10000 then Closing stock must be shown in P&l A/C and Balance sheet.In the F.Y. 2011-12 there was no transaction relating to material X and the stock remained as it is. Then it must be shown in the Balance sheet only as it is not related to operation of the business.