Closing stock refers to the value of goods that remain unsold at the end of an accounting period. The treatment of closing stock in the financial statements depends on the accounting method used by the company, which could be either the perpetual inventory system or the periodic inventory system.

Perpetual Inventory System: Under this method, the closing stock is recorded in the inventory account at the end of each period. The cost of goods sold is calculated by subtracting the value of closing stock from the total cost of goods available for sale. The closing stock is then included in the balance sheet as an asset.

Periodic Inventory System: Under this method, the closing stock is determined by physical count at the end of the accounting period. The cost of goods sold is calculated by subtracting the cost of closing stock from the cost of goods available for sale. The closing stock is then included in the balance sheet as an asset.



Outstanding expenses refer to the expenses that have been incurred but not yet paid at the end of an accounting period. The treatment of outstanding expenses in the financial statements depends on whether the expense has been accrued or not.

Accrued Expenses: Accrued expenses are those that have been incurred but not yet paid or recorded in the books of accounts. These expenses are recorded as a liability in the balance sheet and as an expense in the income statement.

Unaccrued Expenses: Unaccrued expenses are those that have not yet been incurred but are expected to be incurred in the future. These expenses are not recorded in the financial statements until they are incurred.



Prepaid expenses refer to the expenses that have been paid in advance but relate to a future accounting period. The treatment of prepaid expenses in the financial statements depends on whether the expense has been consumed or not.

Consumed Prepaid Expenses: Consumed prepaid expenses are those that have been paid in advance but have been consumed during the accounting period. These expenses are recorded as an expense in the income statement and as an asset in the balance sheet.

Unconsumed Prepaid Expenses: Unconsumed prepaid expenses are those that have been paid in advance but have not been consumed during the accounting period. These expenses are recorded as an asset in the balance sheet and are carried forward to the next accounting period.

Closing Stock is shown on the Credit Side of Trading Account. ... and Closing Stock appears on the Asset side of Balance Sheet.

The outstanding expense is those which has been incurred and consumed during the accounting period and are due to be paid.The outstanding expense is a personal account and is shown on the liabilities side of balance sheet.when expenses are not paid on time they are outstanding.

Prepaid expenses are not recorded on an income statement. ... When a company prepays for an expense, it is recognized as an prepaid asset on its balance sheet and reduces the company's cash by the same amount, keeping the balance sheet in balance.