I have a question if you don't mind. My book says that closing stock should be shown as a note at the foot of the trial balance . Why it cannot be shown together with other balances?
I think you might find that this page then goes on to say - keep that info there for the time being as you will use it in a later exercise (chapter 11 perhaps??). Remember - they are not giving you all of the answers at this point in the book, but leading you on the journey.
Have a sneak peak at later in the book as long as it doesnt confuse!
Hint - closing stock is the adjust entry
-- Edited by Cheshire on Saturday 23rd of January 2016 03:54:18 PM
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Just had a quick glance. I think that the question that you are referring to is 8.3 on page 80 in my version.
Rather than giving you the answer go back again to the section marked "Stock of unsold goods at the end of period" (section 8.6 in my book) and work through that again paying particular attention to the fact that they are working out the cost of goods sold in the first calculation under the trial balance.
As Joanne states that will feed into later excercises (in the case of my book, 9.3) where you are using the trial balance that you used to create the P&L in chapter 8 to draw up a balance sheet. Thats where Joannes clue about it being an adjusting event should become clear to you.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
