(29) Stock/Stock in Trade
Stock includes the value of those
goods which are purchased for reselling and which are lying unsold and the end
of accounting period. Stock may be of two types:
Opening Stock: Opening Stock means the value of goods/lying unsold at the beginning of the
accounting period.
Closing Stock: Closing Stock the value of goods lying unhold at the end of the
accounting period.
Inventory
In case of manufacturer,
there can be opening and closing Inventory as under:
1. Inventory of Raw Material: It includes the Inventory of Raw Materials purchased for using them in
the products manufactured but still lying unused. For example; the value of
cotton in case of cloth mills, is the inventory of Raw Material.
2. Inventory of Work-in-Progress: It is also termed as Inventory of partly finished goods. It means goods
in semi-finished form. Such goods needs further processing for converting into
finished products. In case of cloth mills, the value of threads and unfinished
cloth will be the Inventory of work in progress.
3. Inventory of Finished Goods: It includes the Inventory of those Goods which have been completely
processed and ready for sale but are lying unsold and the end of accounting period.
In case cloth mills, the value of finished cloth will be the value of Inventory
of Finished Goods.
4. Inventory of Stock in Trade: It includes the value of those goods, which are purchased for reselling.
Distinction Difference
between Stock and Inventory
Stock refers only to the value of
those goods, which are purchased for reselling and which are lying unsold at
the end of accounting period.
Whereas the Inventory is a wide term
which includes stock also. Thus the inventory
includes the following:
i. Inventory of Raw Material
ii. Inventory of Semi-Finished Goods.
iii. Inventory of Finished Goods.
iv. Inventory of Stock.
