What is opening stock

Subscriber sign in You could not be signed in, please check and try again. Username Please enter your Username. Password Please enter your Password. Forgot password? Don't have an account? Sign in via your Institution. Click on the arrows to change the translation direction. Follow us. Choose a dictionary.

Clear explanations of natural written and spoken English. Usage explanations of natural written and spoken English. Grammar Thesaurus. Word Lists. Choose your language. At the beginning you must get to know if you are entitled to further deduction. It can turns out that you have to add back some trading stock value as income. This procedure helps to prevent from owners purchasing large amounts of stock to claim early deduction.

Second calculation requires deducting the cost of goods sold from receipts. It can be determined by the value of opening and closing stock. Opening stock value is the same as the closing stock from previous tax year. If closing stock value exceed the value of opening stock it means that excess will be added to your assessable income. If the value of closing stock is lower than value of opening stock it means you can claim an additional tax deduction.

Lost or destroyed stocks does not apply for additional deduction and will not be part of closing stock. Spare parts kept for repair are not classed as trading stock L. Tyler , Anonymous Not logged in Create account Log in. CEOpedia Management online. Namespaces Page Discussion. More More Languages. Page actions Read View source History. Stock adjustment Closing stock rarely is valued at the last day of the financial year.

There are 4 methods of valuing closing stock J. Entry for Cost of sale. Entry for sale of goods. Sales Account. Return of purchased material. There are two options for recording purchase material return.

Goods Return Account. If our supplier supplies us some other material in exchange of material returned. Raw Material Stock Account. In the first case above, cash is received in return of goods. In the second case, defective goods are. That is why, we debited our stock account. Both entries are correct for. Option 2. Stock Account. Example 1. Purchased goods for cash Rs. Purchased goods on credit from ABC Co.

Sold goods whose cost was Rs. Returned goods to ABC Co. Paid to ABC Co. Answer following questions. What is the cost of goods sold? What is the value of closing stock? What amount is payable to ABC Co.? Cash Account. Code Date No. Purchased goods for cash. Stock Account Code