I am a Sole Trader.
I have created a journal at the end of the year to enter opening stock and closing stock, following the instructions in Knowledge Base.(Journalling opening and closing stock totals)
This shows up correctly in the P&L Statement, but not in the Balance Sheet.
I did not buy stock within the year (it is not my main line of business), so the closing figure was less than the opening figure.
Code 1001 for Stock is showing the balance as a liability, by the amount sold (i.e. the difference between opening and closing stock), instead of the balance of stock in hand. Wondering what I’ve done wrong on the journal.
Hello @AnneL
We can only provide general advice on how to enter information.
For more complex accounting queries I would run it past you accountant who will give expert advice as I am not an accountant nor bookkeeper.
If you don’t have an accountant, we have a panel of accountants familiar with QuickFile to choose from, for more information, please see the following link:
Usually when you have opening stock to journal, it is there because there was already a “stock” asset (i.e. debit) balance on your balance sheet from the previous year’s closing stock figure. The credit 1001 line in the journal reverses the previous year’s closing stock, the debit 1001 line inputs this year’s closing stock which would then become the year end balance sheet value for 1001.
If your balance sheet 1001 is showing a liability as you describe then that suggests to me that you didn’t have the previous year’s closing stock on the balance sheet in the first place.
Thank you, Ian. I think you’re right because the previous year was my start up and I introduced it as Stock incorrectly. I did re-open this and tried to journal the correction in that year but it hasn’t shown up as I expected it to.
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