Financial Statements – II · Class 11 · CBSE · Commerce Accountancy
What is the accounting treatment of Closing Stock when it is given inside the Trial Balance?
Practice question from Financial Statements – II (Class 11 · CBSE · Commerce Accountancy), with the correct answer and a step-by-step solution.
medium · MCQ · Q-77D380
What is the accounting treatment of Closing Stock when it is given inside the Trial Balance?
- A.It is debited to Trading Account and shown as an asset on the Balance Sheet.
- B.It is credited to Trading Account and shown as an asset on the Balance Sheet.
- C.It is only shown as an asset on the Balance Sheet.Correct answer
- D.It is deducted from Purchases in the Trading Account.
Solution
When closing stock appears inside the Trial Balance, it means the entry for opening stock and purchases has already been adjusted (or adjusted purchases is given). Therefore, it is shown only on the asset side of the Balance Sheet and not credited to the Trading Account.
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