when is the closing stock not entered in the trading account?

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Because closing stock is a Asset it will come in Balance Sheet.

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correct jatin its look like u are topper

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noif it is given outside the trial balance then it will come unterstand

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If it is given in trial balance in that case it is already adjusted from purchase account that's why it will not recorded in trading account
it will transfer to balance sheet asset side only

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when closing stock is given as adjustment , it will come incr side of trading acassests of balancesheet

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company is an artificial person created by a law having separate legal entity and a common seal

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What is company

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Introduction:
The trading account is a financial statement that summarizes the revenue and expense transactions related to the purchase and sale of goods. It is an important component of the final accounts of a business. The closing stock represents the value of unsold goods at the end of an accounting period. Generally, the closing stock is included in the trading account as it affects the calculation of the cost of goods sold. However, there are certain situations where the closing stock is not entered in the trading account.

Reasons for not entering closing stock in the trading account:

1. Incomplete records: If a business does not maintain proper records of its stock movements, it becomes difficult to determine the value of the closing stock accurately. In such cases, it is not feasible to include an estimate of the closing stock in the trading account.

2. Periodic inventory system: Under the periodic inventory system, the value of closing stock is determined only at the end of the accounting period. Since the trading account is prepared periodically, it does not include the closing stock because the value is not known until the end of the period.

3. Consignment sales: In consignment sales, goods are sent by one party (consignor) to another party (consignee) for selling on their behalf. The consignee does not own the goods and therefore, the closing stock of consigned goods is not included in the trading account of the consignee.

4. Valuation errors: If there are significant errors in valuing the closing stock, it may be prudent to exclude it from the trading account. This can occur due to incorrect valuation methods or misinterpretation of market prices, leading to an inaccurate representation of the cost of goods sold.

5. Obsolete or damaged stock: If a business has obsolete or damaged stock that is unsalable, it may choose to exclude the value of such stock from the trading account. This ensures that the trading account reflects the true cost of goods sold and does not include the value of unusable stock.

Conclusion:
In conclusion, the closing stock is generally included in the trading account to calculate the cost of goods sold accurately. However, there are circumstances such as incomplete records, periodic inventory system, consignment sales, valuation errors, and obsolete or damaged stock where the closing stock may not be entered in the trading account. It is important for businesses to carefully evaluate these situations and ensure that the trading account reflects a true and fair view of the financial performance.

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Trading account from the following balance as on 31st March 2021 Stock (1.4.2020). 32,000 Purchase. 8,50,000 Sales 9,00,000 Return inward 50,000 Closing stock (31.3.2021). 40,000 Carriage on purchase. 12,000 Duty and clearing charges 6,000?

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Why Closing stock not calculate under trial balance?

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