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Question

In Trading and Profit and Loss account, opening stock appears on the debit side because it forms the part of the cost of sales for the current accounting year.

A
True
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B
False
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Solution

The correct option is A True
closing stock minus opening stock gives you the cost of goods used from the stock in hand. That's why opening stock is debited and closing stock is credited - To give effect to how much stock is used during the year for the sales.

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