Year End Stock

[mandyandy]

Hi,

Could someone please explain how to Journal Year End Closing Stock Properly as i have seen different examples shown. Also will It then transfer Closing Stock to Opening Stock for the next year automatically?

Thanks in Advance
Mandy.

[QFMathew]

Hi @mandyandy

Basically you have 2 journals - one dated on year end for closing stock, one dated for year start for opening stock. These are not created automatically. Some smaller businesses don’t bother with these, but I’d advise you to speak to your accountant if you’re unsure (I’m not one).

So, in my example I have a business with year ending 31st March 2016. I’ve purchased £24,610.00 worth of stock in that year, and sold £22,040.00 (including my mark up). I’ve valued my stock as of 31st March 2016 at £5,200.00, so I can now create the closing stock journal:

Which I then reverse on 1st April 2016:

What this does is shows up on my balance sheet for year end:

and also factored in on my P&L report:

I hope that helps?