Closing Stock appearing in the Trial Balance is shown _____________________.

Only on the debit side of Trading Account

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Only on the credit side of Trading Account

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Both on the credit side of Trading Account as well as on Assets side of Balance Sheet.

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Only on the Assets side of the Balance Sheet.

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Solution

The correct option is C Only on the Assets side of the Balance Sheet.
Closing stock generally does not appear in the trial balance because it is the leftover of the purchases which is already included in the trial balance. An exception is when closing stock is adjusted with the purchase account balance.
Closing stock appearing in the trial balance is shown on the asset side of balance sheet to show the status of assets with the firm.

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Similar questions

State whether the following statement are true or false.

1. Final Accounts are prepared on the basis of Trial Balance.
2. Trading Account is a part of Profit & Loss Account.
3. Profit Loss Account is prepared to find out Gross Profit or Gross Loss.
4. Gross Profit or Gross Loss is transferred to Balance Sheet.
5. An amount of net profit is added to the capital.
6. All indirect expenses are debited to trading account.
7. Balance Sheet is a statement and not an account.
8. Capital account is a personal account.
9. Amount of prepaid expenses appears on assets side.
10. Bank Overdraft is a liability of business concern.

On dissolution, how will you deal with partner's loan if appears on the

(a) assets side of the balance sheet,

(b) liabilities side of balance sheet.

On dissolution, how you deal with partner’s loan if it appears on the

(a) Assets side of the Balance Sheet.

(b) Liabilities side of the Balance Sheet.

On dissolution, how you deal with partner’s loan if it appears on the

(a) Assets side of the Balance Sheet

(b) Liabilities side of the Balance Sheet

From the following trial balance of Mr. A. Lal, prepare trading, profit and loss account and balance sheet as on March 31, 2017.

Account Title	Debit Amount Rs	Credit Amount Rs
Stock as on April 01, 2016	16,000
Purchases and Sales	67,600	1,12,000
Returns inwards and outwards	4,600	3,200
Carriage inwards	1,400
General expenses	2,400
Bad debts	600
Discount received		1,400
Bank over draft		10,000
Interest on bank overdraft	600
Commission received		1,800
Insurance and taxes	4,000
Scooter expenses	200
Salaries	8,800
Cash in hand	4,000
Scooter	8,000
Furniture	5,200
Building	65,000
Debtors and Creditors	6,000	16,000
Capital		50,000

Closing stock Rs 15,000.

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