When closing stock is given in trial balance, then it will effect ___________.

Trading account only

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Balance sheet only

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Owner's equity only

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Both Trading account and Balance sheet

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Solution

The correct option is C Balance sheet only
Closing stock usually doesn't appear in the trial balance, if it does it will appear only in balance sheet on the assets side and not in the trading account. It is the stock left in business at the end of the year. It is basically the inventory the company has in hands at the end of the year or is unsold. It includes work-in-progress, raw materials, finished goods, etc.

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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

If 'adjusted purchases' and 'closing stock' are given in the trial balance, will you transfer 'closing stock' to trading account? Give reason.

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.

When closing stock is given in trial balance, then it will effect:

Show the treatment of prepaid expenses, depreciation and closing stock at the time of preparation of final accounts when:

(a) When given inside the Trial Balance?

(b) When given outside the Trial Balance?

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