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Understanding Stock Effect

This chapter covers

  • Understand effect of entries on stock management..
  • How stock is calculated.

A] Opening Stock

Stock, at the start of the year(1st April) is called "Opening Stock"
  • Generally, in any accounting software, entry of opening stock is created in Items - master list.
  • Opening Stock (in Amount) :

    It is calculated as (Op. Stock [qty] X Purchase Rate of that Stock).


  • B] Regular Entries

  • In "Purchase Entry" - the stock [qty] increases.
  • In "Purchases Return" (Debit Note) - the stock [qty] reduces.
  • In "Sales Entry" - the stock [qty] get reduces.
  • In "Sales Return" (Credit Note) - the stock [qty] increases.

  • C] Closing Stock

  • Closing Stock = (Opening Stk.)+ (Purchase) - (Sales)
  • It is the stock found at the end of the financial year (31st March).
  • Closing Stock (in Amount)
  • It is calculated as (Cl. Stock [qty] X Purchase Rate of that Stock).


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