Last Updated on: 5th July 2024, 01:47 pm
Closing Stock Value in Tally PRIME
Closing Stock Value in Financial Statements
After entry of all sorts business transactions and adjustment journal vouchers, you are ready to get Final Accounts Statements (PL Statement & Balance Sheet).
Inventory Value in Financial Statements
For a pure service orgnanisation (like Consultancy Firm), who do not trade in any materials, there may not be any tradable stock involved. In that case, the Profit & Loss Statement and the Balance Sheet may be readily obtained after voucher entry.
Entry of Inventory Value in Accounts Books
However, for organisations having trade materials in stock, the Closing Stock Value must be entered, to get Final Accounts Statements (PL Statement & Balance Sheet). In traditional method, the Closing Stock is entered through Journal Voucher, at the end of Financial Year.
Entry of Inventory Value in Tally Prime
However, to facilitate Final Accounts Reporting for mid period (in middle of Financial Year – i.e Month end, Quarter end, Half Year end etc), Tally provides a novel and flexible means of entry of Closing Stock value for multiple dates . This, in fact, amounts to several Journal Entries for respective dates, which remain dormant in the system. A virtual Journal Entry gets activated and considered for the report for selected report period, So, you can get the Final Accounts of any period, without having to enter / edit Journal Voucher for Closing Stock, each time you print the reports.
To get Final Accounts instantly for any period (including past mid periods for comparison), do not enter Journal Voucher for closing stock at the end of Financial Year (as traditionally done by Accountants). Instead, just enter the Closing Stock value for the respective date at Stock-in-Hand Ledger (the Ledger Account in which the Opening Stock value, if any, is also entered as Ledger Opening Balance).
The other impact of this system, is that Closing Stock Value is reflected in Financial statements through back door, without any entry in Accounts Books. It is easy to instantly manipulate Financial Results in one stroke, just by changing the Closing Stock Value.
Closing Stock value in Tally
The difference in entry process in traditional Journal Voucher for Closing Stock Entry and the method of Closing Stock Entry in Stock-in-Hand Ledger Master, are :
| Journal Voucher entry in Traditional Method | Entry at Stock-in-Hand Ledger Account in Tally |
| A Journal Voucher is created for the Closing Stock Value for the Financial Period end Date | No Journal Voucher is created for the Closing Stock Value. Instead, Closing Stock value for respective Date is entered in Stock-in-Hand Ledger Account through Ledger Alteration |
| Only one Journal Voucher may be created for the respective period end. | Closing Stock value for multiple dates (e.g for each month, or for each quarter etc) may be entered in Stock-in-Hand Ledger. |
| For Final Accounts Report, for each period end (monthly, Quarterly etc), you have to delete the previous voucher and create another voucher for the respective Date. So, the voucher for previous period gets deleted and only one closing stock value remains in the data, at any point of time. | Just add the date & closing stock value for the respective date, at the Stock-in-Hand Ledger Account. So, the closing stock value for all the periods may simultaneously remain (the previous values do not get deleted) in the data, at all point of time. |
| To get Final Accounts for previous period (or for another period), you have delete the Journal Voucher and create a new Journal Voucher for the Closing Stock Value for the respective period | At any point of time, you may instantly print the Final Accounts for any period end (even the pervious period, if required) for which Closing Stock Value has been entered in Stock-in-Hand Ledger. |
So, Tally provides a dynamic method of entry of Closing Stock Value to enable display of Final Accounts statement (P L statement & Balance Sheet) for any mid period and a comparative / composite statement for any past periods.
Multi Date Closing Stock Value Entry
Tally provides its own novel way of entry of Closing Stock Value. It can be entered on the fly, in Stock Ledger Account Master, without recording in any books (like Journal). So, entry of Closing Stock Value does not appear in Journal Book or Books of Accounts.
Select GoT>Accounts Info>Alter and select the respective Closing Stock Ledger Accounts to get Ledger Alteration screen. At Closing Balance field (this field appears only in Alteration of Ledger Accounts under Stock-in-Hand Group), enter the Date and Value of Closing Stock on the Specified Date, for the respective Closing Stock Ledger Account.
You may enter Closing Stock Value for several Dates (e.g for each month end, quarter end, H/Y end, Year end etc). In fact, you should enter the Closing Stock Value for the Date for which you print the Balance Sheet / Profit & Loss Statement.
The respective value of closing stock would be shown according to the reporting period.
Multi Date Closing Stock value entry in Tally Prime
After you enter the Closing stock value, you get the final Profit & Loss Statement & Balance Sheet as per The Closing Stock value entered in Stock-in-Hand Ledger Account
You can enter the Closing Stock Value through Ledger Alteration mode only (NOT during Stock Ledger Account creation). At the time of Stock Ledger creation, you may enter the Opening Stock Value at Opening Balance field
As the Closing Stock Value is not entered through Journal, it does not appear in Trial Balance.
Summary
- The Ledger Account of Stock In hand, contains additional info of multiple Closing Stock Value, embedded in it. During display of Final Accounts Statement, like Balance Sheet / Profit & Loss Statement, the value is dynamically shown in the Report. The advantage (or the purpose), is that the Closing Stock value, and hence the P L statement & balance Sheet, may be dynamically changed any time as needed, without affecting any books of Accounts (even without making any voucher entry).
- To allow mid period Statement of Accounts, Tally provides for Closing Stock Value for any Date and dynamically get report for any date.
- Even if Inventory system is maintained, the Closing Sock Value may be specified and changed freely, without linking any part of the Inventory System.
