Trial balance

System
System Posts: 100,537 🤖 Admin 🤖
edited June 9 in AAT member discussion
Hi Everyone <BR><BR><BR>If you start a new business at the end of year due you include the stock you have left on the trial balance ?<BR><BR>generally what happens with closing and opening stock?<BR><BR>Thanks to all that help

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  • System
    System Posts: 100,537 🤖 Admin 🤖
    Trial balance

    Erm I think I understand the question. The Stock at the year end is both in th P&L and BS
  • System
    System Posts: 100,537 🤖 Admin 🤖
    Re:Trial balance

    Yes...the profit and loss closing stock will be a credit balance, and would be shown in the cost of sales calculation, and the balance sheet stock would be a debit balance and sit in the current assets under debtors.

    If it was a new business then you probably wouldn't have any opening stock.

    When you come to do the next year/period, then you would post a journal to the opening stock in the profit & loss equal to what the closing balance was and post the new closing balance - if you have a difference then I believe this would (usually) go to purchases in the year.

    I think that makes sense.

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