Question

Journal entry for transfer of opening stock is -
Trading A/c Dr.
To Opening Stock A/c

• A. True
• B. False

Answer 1

The correct option is A True

The given journal entry to transfer opening stock is correct because trading account was to be debited and opening stock account was to be credited which is done right.

Debit an item means reducing the balance whereas credit an item means increasing the balance.

Opening stock is usually forward from the previous year. So the opening stock account balance will be raised when opening stock is carried forward and hence it will credited. But trading account is debited because opening stock is taken out of trading account only while carrying forward to next year.