Page 5 - Trading Stock

Opening and Closing stock

 Basic principles of accounting apply

 Ito cost of sales (accounting)

Cost of sales =
Opening stock is deducted from profit Opening stock

Purchases are deducted from profit + Purchases

- Closing stock
Closing stock is added to profit

 Ito tax

Opening stock is deducted from taxable income

(s22(2))

Purchases are deducted from taxable income (s11(a))

Closing stock is added to taxable income (s22(1))

5