Class Notes (838,076)
Canada (510,662)
Accounting (91)
ACCT 301 (31)
All (31)

chapter 15.docx

2 Pages
Unlock Document

ACCT 301
All Professors

Chapter 15 At the end of the accounting period, when the accountants begin to close off accounts in preparation for the financial statements, there are a few important tasks to do first. The first of which is to calculate the closing stock of the period, to prepare the Trading, Profit & Loss Account, Bank Reconciliation, etc. Stocktaking On the bases of the accruals concept, revenues should be matched with their relevant cost as per the corresponding period. As such, any stock that remains unsold at the end of the accounting period isn’t included as a part of the cost of sales for that period. Get it? Well, it’s like a prepayment, u don’t actually account for it during the current period, because it is relevant only to the following period. Well, for this reason, the company should find out how much stock it has on hand at the end of the accounting period, this stock is called closing stock, and the process of finding out how much you have of it is called stocktaking. This process is easy if the company is a relatively small where it could actually physically count each item of stock. Yet as the business grows larger the quantity of stock held becomes harder to determine. Therefore a business may wish to close down for a short period for a stock take, or a business may prefer to keep a detailed record of stock movements whilst baring the large related costs and headaches! In more complicated cases, a business may wish to maintain continuous stock re
More Less

Related notes for ACCT 301

Log In


Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.