The year end journal doesn’t touch general purchases. If you have £1000 worth of stock left at the end of the year then you journal
- Debit “stock” £1000
- Credit “closing stock” £1000
This means your final P&L for the year will look like, e.g.
- General purchases: debit £100,000
- Closing stock: credit £1,000
- Total cost of sales: debit £99,000
and you’ll have £1000 of stock in hand on your balance sheet. If you already had a “stock” figure from the previous year end (or looking ahead, this is what you will need to do next year) then you would journal that the other way, credit stock/debit opening stock. This would give you, e.g.
- Opening stock +2000 (same value as the previous year’s closing stock)
- General purchases +100,000
- Closing stock -1000
- Total cost of sales £101,000