Distinguish between stock at start and stock at close

The purpose of this account determines gross profit or loss. Gross profit is the excess of the sales over cost of goods sold, including the expenses directly attributable to put goods in a saleable condition.

The cost of the goods is represented by the value of the goods purchased during the period, including carriage in bringing the goods to the trade premises.

Gross profit (GP) = Sales - Purchases.

Gross loss (GL) = Purchases - Sales.

Unsold goods and are of two kinds, opening stock and closing stock.

is unsold goods which available at the beginning of trading period e.g. Available before starting business.

unsold goods available at the end of trading period i.e. goods remained unsold at the end of trading period.