I have posted the following Cost of Goods Sold calc:
Cost Of Sales
Opening Stock
1,357.30
+ Purchases
3,401.46
Less Closing Stock
1,576.91
3,181.85
The problem is the closing stock figure is based on a year end stock take? I think I needed to post some kind of stock adjustment to reflect this in the accounts. The closing stock balance in my stock account is £1,398.73 but should be £1,576.91 as per my COS calc, so a difference of £178.18
Can someone help me out with the double entry to get my TB correct? I know I will need to Dr Stock 178.18 but where does the credit go?
Trading Account (COS) - Do you mean its COS and part of the calculation i.e. Opening Stock +purchase less closing stock? Not sure which account to post the credit to?
Is it just the difference I need to post of £178.18??
When you're doing your year-end stock journal, you make the following entries:
DR Closing inventory XYZ CR Profit and Loss XYZ
With the debit, you're recording the closing stock as an asset, which shows on the Balance sheet or SOFP at current assets, while the credit entry reduces your cost of sale for the period since the value of the closing stock is carried forward to next year's accounting period when it's going to be used up as Opening Inventory. Then next year, your balance on Closing inventory (asset type a/c) could be transferred to Opening inventory (revenue type a/c, which forms part of next year's COS calculation). The entries you should make strictly speaking reversing the original closing dr and cr and correcting it with the correct amount, but with VT T+ you could just overwrite the numbers. If you're using PIA Sage then you have to reverse journal your original entries, then enter your amounts with an another journal. I haven't touched Sage's stock module/part anyway, so I don't know how it works.
