Accounting Treatment of Closing Stock When Adjusted Purchases Given in Trial Balance


If Closing Stock already appears in the Trial Balance, then no Adjusting Entry is required to be passed Since it has already been taken into account While the amount Of Adjusted purchases’ or ‘Cost of Goods Sold’.

  • When Adjusted Purchases is to be shown on the debit side of the Trading Account but the closing stock is not shown on the credit side of the Trading Account. It means closing Stock  already adjusted in purchases. Then closing stock will be shown only on the assets side of the Balance Sheet under Current Assets.

Adjusted Purchases

Calculation of Adjusted Purchases  

= Net Purchases + Opening Stock – Closing stock.

Net Purchases = (Gross or Total Purchases – Purchase Return and Allowance – Drawing of Goods )

Gross or Total Purchases mean Cash Purchases plus Credit Purchase without deducting purchase Return and Allowance and Drawing of Goods.

Drawing of Goods mean when owner withdraw goods from business for Personal use.

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