No, it decrease cost of sales and increases gross profit.Closing stock is not shown on a trial balance and when entered into the income statement, the closing stock will carry through to the balance sheet and increase retained income.
opening stock +purchase-sales =closing stock
Cost of sales = opening stock + purchases-closing stock Cost of sales = opening stock + purchases-closing stock
closing stock will increase current assets in Balance sheet
Closing Stock:-Last years Gross profit*Present year sales account+direct and indirect account+purchase account+opening stock-sales account
GROSS PROFIT = SALES - [OPENING STOCK + PURCHASES + DIRECT EXPENSES - CLOSING STOCK]... substitute if u have all the other values
opening stock +purchase-sales =closing stock
Cost of sales = opening stock + purchases-closing stock Cost of sales = opening stock + purchases-closing stock
Billy Ocean is a trader in seafood. The firm uses a margin of 1/6. For the month of May 2017 his opening stock was 70,000, purchases as $250,000, and closing stock was $120,000. What as his sales?
To calculate the closing stock for a shop, you need to consider the beginning inventory, purchases made during the period, and sales made during the period. The closing stock is calculated by adding the beginning inventory and purchases made during the period, and then subtracting the sales made during the period. The remaining balance is the closing stock.
closing stock will increase current assets in Balance sheet
Closing Stock:-Last years Gross profit*Present year sales account+direct and indirect account+purchase account+opening stock-sales account
A business remaining stock at the end of an accounting period is known as closing stock. It may include the finished goods, raw material and work in process and it is also deducted from the periods costs in the balance sheet. however sales in the trading a/c do have an effect on the gross profit and hence in the profit and loss a/c for the net profit. An increase or decrease in closing stock will have an effect on the net profit..if closing stock increase the gross profit will increse and vice versa. As the gross profit will increase the firm will able to deduct more expenses from it and hence the remaining will be the net profit.( increase)
Stock turnover period = Closing stock x 365 / cost of sales
GROSS PROFIT = SALES - [OPENING STOCK + PURCHASES + DIRECT EXPENSES - CLOSING STOCK]... substitute if u have all the other values
You can figure annual sales in various ways. The easiest way is by adding the opening stock to the purchases. You should them subtract the closing stock for the year and you will get the annual sales.
Total Sales + Closing Stock - Opening Stock - Goods Sent To Branch
Opening stock minus closing stock times cost per unit