closing stock

meibaker

in trial balance, why you should enter closing stock on both debit and credit side, do i need to think as close stock (p&l) and close stock (b&s), am i right?
many thanks

Paul24

Yes.

Inventory figure on the balance sheet reflects the closing stock as at last day of the year.

It is included in cost of sales on the P&L

Extracted as;

Cost of Sales

Opening Stock
Add Purchases
Less Closing Stock

It is reducing the cost so is therefore a credit in P&L. It is an asset, so is therefore a debit in the BS.

Paul

meibaker

thanks