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Question

If closing stock appears in the trial balance then it appears in _______.

A
Trading account
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B
Profit and Loss account
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C
Balance sheet
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D
Profit and loss appropriation
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Solution

The correct option is C Balance sheet
If closing stock appeared in Trial balance it means the purchases has been reduced to the extent of stock amount at the end of the period. The accounting treatment will be closing stock to be shown in Balance sheet under current assets and it should not be credited to Trading a/c.

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