Whats the reason

I dont think it is possible.closing stock can be zero but it cant be negative

They might have not recorded all stock transfers properly

Check the accounting done

Have a glance over Incoming Stock in particular

Check whether they recorded everything 

At first I must say that its not possible as per my knowledge. But, if it is so then there must have many duplicate worng entries in for sales. check the sales ledger throughly.. that must be the only reason.

@ Bimal

One such instance of having negative closing stock balance in my view is below:

A business may be having a stock that has become obsolete due to some reasons and to dispose off the same, it may cost more than its net realisable value, or, there may be a possibility that if the stock becomes damaged due to fire, flood or other calamity, resulting that such stock needs to be disposed off, but its damaged condition means that the necesaary disposal costs exceeds its proceeds, if any. Let others comment.

It is possible in one case....

@ BIMAL

CLOSING STOCK CAN NEVER BE AT A NEGATIV VALUE AS FAR AS MY KNOWLEDGE IS CONCERND........

@ KRISHNA 

THE OBSOLETE STOCK THNG  WCH U WROTE , I THINK  SO IS MAYB NT CRRCT.BCOS D RULE IS 2 SHOW C.STOCK @ COST OR NET REALISABL VALUE WCHEVER IS LOWER. SO EVN IF DISPOSAL COSTS XCEED ,RESULTIN IN A NEGATIV NRV,D STOCK CN ALWAYS B SHOWN AT COST.....DATS MY OPINION,LETS C WT ODRS HAV 2 SAY........  :)

Generally we can speak that stock value can never be negative.

But sometimes this situation occurs in some small organisations.

The same thing was happened with me. Actually the account personnel enter the stock in the books on receipt of bill from the vendor whereas it is consumed by the production dept. on receipt of goods from the vendor. There was a time gap between receipt of goods and bill.

But i don't think that this practice is good. So it may be the case with your organisation also.
 

closing stock cannot be negative... :) :P

Dear Bimal,

The one possible case might be is inward of stock might have not been recorded properly, But the stock issues are consistent. Say

Opening Stock                                      50.

Stock Inward                                        100

Total Stock                                           150.

Stock Issued                                       (125)

Closing Stock                                        25

In the above illustration if Inward has by mistaked not accounted in the books than the closing stock will be: -

Opening Stock - Stock Issued i.e.,

50  -  125   =  -75.

And other than above illustration even I don't believe of that stock will be in negative.

All the Comments on the above are heartly welcomed.

Check in the Software if the entry of Opening Stock have been posted or not