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In the sixth video sir said about closing stock adjustment Op +purchases - Cs = Cost of goods sold Is COGS AND SALES SAME IF SO WHY COGS IS GIVEN ON DEBIT SIDE OF TRIAL BALANCE
Answers (15)
CA Suraj Lakhotia Admin
Closing stock is an asset and will have a debit balance.
Both opening and closing stock also has debit balance. But one is on debit side and the other is on debit of profit and loss account
Thread Starter
Prasanth kumar KamisettyBoth opening and closing stock also has debit balance. But one is on debit side and the other is on debit of profit and loss account
Opening stock is generally given in TB. Closing stock in adjustment. When you bring the adjustment in final accounts, entry is Closing Stock (Dr) [Asset account] To Profit and Loss Ac.
Thread Starter
Prasanth kumar KamisettyEven the entry is same when we transfer opening stock to trading account
Trading A/c Dr To Opening Stock.
Thread Starter
Prasanth kumar KamisettyIs cost of goods sold and sales same
No. One is cost and other is income.
CA Suraj Lakhotia Admin
No. One is cost and other is income.
But in trading account we have OS +PUR+D.E ON DEBIT SIDE AND CLOSING STOCK on credit side which means if closing stock is reduced we should get the amount equal to sales Even formula for cost of goods sold is also same So why these two are different
CA Suraj Lakhotia Admin
Gross profit?
If we add sales and closing stock and deduct the debit items said above we get gross profit But if we keep aside sales and deduct only closing stock from the debit items we get amount of sales
CA Suraj Lakhotia Admin
No. You will not get. You can put some numbers and see.
Ok sir If we have to pay rent to A in this year which is is not paid Can we write RENT A/C To A or only rent a/c to rent payable
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