Krishna Teja (Chartered Accountant) (1007 Points)
11 June 2010hi i am teja. one of my friend asked me a question i couldnt answer appropriately plz help me 4 saying him
his question is
generally nominal accounts are posted to trading and p&l account and real & nominal accounts in balance sheet
but why will we post the stock(goods i.e opening stock, purchases, closing stock) account to trading account though it is REAL account
i said me it is the normal practice is it right
Venkateswara Rao Sapare
(Accountant)
(1500 Points)
Replied 11 June 2010
Dear Friend,
Stock is classified as follows
Here, "Closing Stock" refers to
Now, let us focus our attention only on "CLOSING STOCK".
This "CLOSING STOCK" is an item, which carries unique commercial feature, i.e. it never factors in the "TRAIL BALANCE"., which enables it to reflect twice in the Financial statements., first in (1) Balance Sheet and second in (2) the Statement of Profit & Loss.
You all may be sure that there is no such item like "CLOSING STOCK", with similar features.
JITENDRA KUMAR DHINGRA
(Executive)
(93 Points)
Replied 12 June 2010
hi friends
basically when we entered the amount of closing Stock,OPening Stock together with Purchases during the year. We tries to find out the stock consumption during the year that should be charged from the trading account.Due to the reason of presentation we mention separately the amoun of Cl. STock/Opening Stock/Purchases......................Stock is Real account........................Stock consumption is Nominal account...............
Regards
Jitendra
25 Hours GST Scrutiny of Return and Notice Handling(With Recording)
Survey, Search and Seizure under Income Tax Act 1961
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