Accounting for IGCSE & O level - Final Statements (Section 1 - No. 8)
How do you know if you have a good closing inventory?
It becomes the opening inventory of next year.
The business will have fewer sales and profit
The business will pay more for their cost.
It has no effect to the income statements.
Paliwanag
Closing inventory of the accounting year becomes the opening inventory of the next accounting year