Adjusting entries are made at the balance-sheet date under an accrual accounting system to ensure that the income and expenditure of a business are included in the correct period. Examples include adjustments for depreciation, prepayments, accruals, and closing stock.
Closing stock refers to the inventory remaining within an organization at the end of an accounting period, including raw materials, work in progress, or finished goods. It plays a crucial role in determining the profitability and financial status of a company.
Opening Stock represents the inventory held by an organization at the beginning of an accounting period, including raw materials, work in progress, and finished goods. It plays a crucial role in assessing the financial performance and stock levels of a company.
