Closing stock appearing in trial balance will be taken to _____________.

Trading account only

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Balance sheet only

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Trading account and balance sheet

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Profit & loss account only

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Solution

The correct option is D Balance sheet only
At the end of the financial year, while closing the books of account there are certain adjustment entries need to be passed by debiting/crediting the trading account or profit & loss account. Entry for closing stock will be passed as:

Closing Stock A/c Dr.
To Trading Account

In the above situation, closing stock appearing in the trial balance will be taken to the balance sheet.
Items that are shown in trial balance are recorded only once.

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Similar questions

A Statement of Affairs is similar to the :

(a) Balance sheet
(b) Trial balance
(c) Trading Account
(d) Profit & Loss Account

State true or false:

1) A Trial balance is an account.
2) A Trial balance is helpful for preparation of final accounts.
3) A Trial balance is most important document.
4) A Trial balance may be prepared on any date.
5) In Trial balance opening stock is recorded in credit balance column.
6) Both sides total of an account are taken in Gross Trial Balance.
7) Purchase account always shows debit balance.
8) A Trial balance is a List of Ledger balances.
9) A Trial balance does not ensure accounting accuracy.
10) A Trial balance shows only arithmetical accuracy.

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.

Q. Steps of preparing Final Accounts is -
(a) Trading Account
(b) Profit and Loss Account
(c) Balance Sheet

Q. From the following Trial Balance, prepare Trading Account, Profit and Loss Account for the year ended 31^st March, 2018 and Balance Sheet as at the date:

Debit Balances	₹	Credit Balances	₹
Purchases	3,00,000	Sales	4,79,760
Drawings	3,500	Purchases Return	12,200
Plant and Machinery	1,23,000	Capital	5,90,000
Motor Vehicles	1,76,000	Creditors	11,870
Building	3,80,000	Bank Loan	33,700
Sundry Debtors	80,000
Stock in Trade (1.4.2017)	8,400
Sales Return	1,800
Wages	2,800
Carriage Inwards	890
Carriage Outwards	300
Telephone Charges	3,290
Salaries	12,000
Insurance and Taxes	31,200
Printing and Stationery Expenses	1,350
Cash in Hand	3,000
	11,27,530		11,27,530

Following adjustments are to be considered:
(i) Closing Stock ₹ 15,270.
(ii) Printing and Stationery expenses due ₹ 58,650.
(iii) Outstanding liabilities for salaries ₹ 12,000
(iv) An old machine value at ₹ 12,000 (Book Value of which was ₹ 2,000) was given in exchange for a new machine purchased on 1^st April, 2017. The machine given in exchange was not recorded in the books. Cheque issued for new machine purchased was accounted in the books of account.
(v) Depreciation @ 10% p.a. is to be provided on all fixed assets except building.

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