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Final accounts Non manufacturing
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)
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
Prasanth kumar Kamisetty
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
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.
Prasanth kumar Kamisetty
Even the entry is same when we transfer opening stock to trading account
Trading A/c Dr To Opening Stock.
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
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
Prasanth kumar Kamisetty
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
No. You will not get. You can put some numbers and see.
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
