Very new to this and learning as I go, so forgive me as this is probably a very basic question.
I started my business Sept 2021. Started with no inventory, but purchased inventory that month. No sales at that time. Also added my own capital to my bank account which paid for the inventory.
I read that I need to skip the Opening Stock Journal as I started with no inventory, and do the Closing Stock Journal before moving on. If I look at my balance sheet report before doing this, my stock is listed under Current Assets, and the figure looks correct. However once I do the Closing Stock Journal, the assets then show double on the balance sheet. Is this normal? or is there something I need to look into?
I want to be sure that what I am doing is correct for this first month, and get my processes in order, before moving on to month 2. I understand once I know this is correct, I will do the Opening Stock Journal for month 2.
This forum is primarily for bookkeepers and accountants in practice but I can give you a couple of pointers.
Your opening balance should be nil as you say but then presumably you are recording purchases as stock? These should be recorded as sales - purchases, and if you want to keep a monthly figure of stock do a stock take every month. None of my clients keep a record monthly though, juy
To properly record stock once you have your nett cost figure you should do a journal - credit purchases debit balance sheet.
-- Edited by Leger on Saturday 5th of March 2022 11:43:46 AM
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
