1. Opening Stock: Closing stock of the previous year becomes the opening stock of the current year which is available on the opening day of new accounting period. However, there will no opening stock in case of newly opened business. It is available in the trial balance that must be debited to the trading account. Opening stock may include the raw materials, work-in-progress as well as finished goods.
2. Purchases and Purchases Returns: Purchases of raw materials or resale goods made during the year are debited to trading account. Both cash and credit purchases are taken into consideration. Purchase returns are deducted from purchases to find out the figure of net purchases.
3. Purchase expenses: All the expenses that are incurred to bring the goods or materials upto warehouses are purchase expenses that are debited to trading account. Carriage inward, cartage, freight inwards, dock charges, clearing charges etc. are some purchase expenses.
4. Manufacturing Expenses: All the expenses relating to the manufacture of goods are manufacturing expenses which are debited trading account. Wages payable to workers engaged in the production of goods and the factory expenses incurred in the operation of factory like, factory lighting, heating, insurance, rent, power, coal, fuel, gas, water etc are examples of manufacturing expenses.
2. Purchases and Purchases Returns: Purchases of raw materials or resale goods made during the year are debited to trading account. Both cash and credit purchases are taken into consideration. Purchase returns are deducted from purchases to find out the figure of net purchases.
3. Purchase expenses: All the expenses that are incurred to bring the goods or materials upto warehouses are purchase expenses that are debited to trading account. Carriage inward, cartage, freight inwards, dock charges, clearing charges etc. are some purchase expenses.
4. Manufacturing Expenses: All the expenses relating to the manufacture of goods are manufacturing expenses which are debited trading account. Wages payable to workers engaged in the production of goods and the factory expenses incurred in the operation of factory like, factory lighting, heating, insurance, rent, power, coal, fuel, gas, water etc are examples of manufacturing expenses.
No comments:
Post a Comment