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Numerical Questions · Q5
Q.

The following are the extracts from the trial balance of M/s Bhola & Sons as on March 31, 2026

Account titleDebit ₹Credit ₹
Opening stock2,00,000
Purchases8,10,000
Sales10,10,000
Total10,10,00010,10,000

(only relevant items)

Closing Stock as on date was valued at ₹3,00,000.

You are required to record the necessary journal entries and show how the above items will appear in the trading and profit and loss account and balance sheet of M/s Bhola & Sons.

Delhi CbseNCERTSubjective· 3mImportance★★★★★est
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Pass the closing-stock entry (Closing Stock A/c Dr. To Trading A/c ₹3,00,000); it shows on the credit of the Trading Account and as an asset in the Balance Sheet. Gross profit works out to ₹3,00,000.

Concept & treatment. Closing stock is not usually in the trial balance; it is brought into the books by a single entry that debits the Closing Stock A/c (an asset) and credits the Trading A/c. Consequently the same figure appears twice — once on the credit side of the Trading Account (reducing cost of goods sold) and once on the assets side of the Balance Sheet.

Journal entry

DateParticularsL.F.Debit (₹)Credit (₹)
2026 Mar 31Closing Stock A/c ...Dr.3,00,000
   To Trading A/c3,00,000
(Closing stock brought into account)

Trading and Profit and Loss Account (extract) for the year ended March 31, 2026

Particulars₹Particulars₹
To Opening stock2,00,000By Sales10,10,000
To Purchases8,10,000By Closing stock3,00,000
To Gross profit c/d3,00,000
Total13,10,000Total13,10,000

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