Closing Stock
Closing stock refers to the goods remaining unsold during the year.
They are valued at Cost price or Market Price whichever is lower.
Closing entries
| Closing Stock Account | Dr. | |
| Trading Account | ||
| (For closing Stock transferred to trading account) | ||
Treatment in Final Accounts
When closing stock is given outside the Trial Balance
It will appear on
- The credit side of the Trading Account
- Under Current Assets in the Balance Sheet.
When closing stock appears inside the Trail Balance
This means that the Closing stocks have already been deducted from the Purchases and thus it will ONLY appear in the Balance Sheet under Current Assets.