4
Question
The closing stock of the year becomes the ______ of the next year.
The closing stock of the year becomes the ______ of the next year.
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Solution
The correct option is C Opening stock
The closing stock represents the cost of unsold goods lying in the stores at the end of the accounting period. The adjustment for the closing stock is done by crediting it to the trading profit and loss account and by showing it on the asset side of the balance sheet. The closing stock of the current year becomes the opening stock of the next year and is reflected in the trial balance.
The closing stock represents the cost of unsold goods lying in the stores at the end of the accounting period. The adjustment for the closing stock is done by crediting it to the trading profit and loss account and by showing it on the asset side of the balance sheet. The closing stock of the current year becomes the opening stock of the next year and is reflected in the trial balance.
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