[PA] Trading account

2009-01-24 6:58 pm

"Closing stock is goods that remain unsold at the year end. It is found by annual stocktaking and is not shown in the trial balance because it has been included in the purchases account. Annual stocktaking is usually held after the year-end date .".....from p.70 of Frank Wood's

I have a qusetion, closing stock is found by stocktaking, and the stocktaking will take place after the year-end date, then how can we do the Trading and Profit and Loss account at the end of the year?

回答 (1)

用戶2576

2009-01-24 7:50 pm

✔ 最佳答案

The issue of having stocktaking primarily for getting the closing stock figuare. The stock taking is usually carried out at the last day of the financial year or the first day of the following financial year. For exampole, if the books are closed at 31 December, the stocktaking will be carried out at 31 Decmeber 2008 or 2 January 2009 in the follwoing year. Druing stock-taking, no stock in or out will take place. moreover, a cut-off procedure must be carried out to come to the actual and coorect ending stock. e.g. goods sold not delivered are not being counted.
After the stocking taking for the quantity and condition of stock is completed, a valuation based on the valuation method e.g. FIFO etc and impairement of stock. A stock amount will come out. This will be reflected in the trading account and the balance sheet as the closing stock for the financial year ended 31 December, 2008 by Dr. Stock - Closing and Cr. Purchase.

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