Understanding Profit and loss Accounts

Accounts and Finance
Step 1 Basic of Accounts - Debits and Credits

Q 3 - Suppose in January, a shopkeeper Purchases 5 Mobile Phones @ 10000 each It sells 2 Mobile Phones @ 16000 each Calculate Profit and Loss

What is Closing Stock?
Stock Which we have not purchased but not sold is called Closing Stock
It is shown on Right Side in Profit and Loss

Is Closing Stock Valued at Purchase Price or Sales Price?
It is valued at Purchase Price
Example;-In our case,Closing Stock is calculated at purchase Price of 30000(3 piece *10000=30000)

What is Opening Stock
Stock which we have at beginning of a month or year is called Opening Stock
Closing Stock of Last Month becomes Opening Stock of Current Month

Q 4 - Continuing Last Question There were 3 Mobile Phone Closing Stock left in Janaury All 3 were sold in February at 18000 each Prepare Profit and Loss of Feb

Q - 5

 Particulars Quantity Rate Amount Opening Stock 3 30000 90000 Purchase 5 30000 150000 Sales 6 40000 240000 Closing Stock 2 ? ?

Calculate Value of Closing Stock

Q - 6 - Suppose Next month

 Particulars Quantity Rate Amount Opening Stock 2 30000 60000 Purchase 10 30000 300000 Sales 11 50000 550000 Closing Stock 1 ? ?