Jurnal entry of closing stock

NAVIN KUMAR (Account Excutive) (75 Points)

24 October 2013

Dear All,

Please clear me the JE of closing stock after Trail balance is

closing stock A/C Dr.

to, purchase A/C

is right or wrong, if wrong then please tell me what is the right entry for this?

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2 Replies

CA Abhishek Goyal (Chartered Accountant) (516 Points)
Replied 28 October 2013

closing stock A/c dr. to

Trading A/c or P/L ac.

Samrendra (Asst. Manager- Internal audit) (226 Points)
Replied 18 November 2013

Some time creation of Trading or Profit and Loss Account create problem while posting such kind of adjustment entry.

There is one alternative which can be used.

First create a ledger name COST OF GOOD SOLD which need to be classified under direct expenses or trading accounts.

[We know that Cost of good sold= Opening Stock + Purchases - Closing Stock]

Than transfer Opening stock and purchases to Cost of good sold by way of journal entry.

Afterward closing stock can be posted by passing Journal Entry

Cost of good sold A/c Dr. xxxx

To Inventory xxxx [classified under Inventory]

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