Issues with presenting sales and stock figure in PNL in the FS

Ding James

Hi, any idea how to leave Sales, open stock, purchase and closing stock in the FS rather than in the notes?

Zappy

What does that even mean? Sales ARE in the PNL so is cost of sales. Closing stock belongs on the balance sheet. Thats where it is. Im mystified by the question. Can you rephrase it perhaps?

Ding James

Sorry , a typo. What I am asking is how to present sale, open stock, purchase and closing stock as seperate items in the PNL section of the FS rather than a line, such as "Profit from trading activities".

Zappy

Well of course you can do it but you need to understand the accounting. You could create these accounts and simply enter a journal once a month. Why do you want to do it?

Michael Macleod

It is not necessary now in this modern age to show closing and opening stock in the P&L when you have a proper stock system although some old fashioned accountants and even younger ones still seem to want it so they can fill in the tax schedule. The more modern way is to just show sales and cost of sales. Some traditions in the accounting  world still stay alive despite being redundant.

Zappy

Mike to be fair its arguable that average cost is not appropriate as a valuation for tax purposes.

Michael Macleod

I have no idea what you are talking about. Average cost has been an acceptable method of valuing stock for donkey's years for both tax purposes and accounting purposes, when you have an integrated system in place. Its easier than using last cost or fifo.   If you do not have a integrated system in place, last cost would be usually be used but in general most businesses do have stock systems now.
Michael