Closing Stock :

The unsold goods in stock at the end of the accounting period is called as closing stock. This is to be valued at cost or market price
whichever is lower.

Example:

The value of closing stock shown outside the trial balance on 31.3.2004 is Rs.1,00,000.

Adjusting Entry

Date	Particulars	L.F	Debit Rs.	Credit Rs.
2004 Mar 31	Closing stock A/c                                                                                                                             Dr		1,00,000
	To Trading A/c			1,00,000
	(closing stock recorded)

 

Value of closing stock will appear
i) on the credit side of trading account and
ii) on the assets side of balance sheet.

Trading account for the year ending 31st March, 2004
Dr.                                                                                                                                                                                                                                                  Cr.

Particulars	Rs.	Particulars	Rs.
		By Closing Stock	1,00,000

 

Balance Sheet as on 31st March, 2004

Liabilities	Rs.	Assets	Rs.
		Closing Stock	1,00,000