OPENING STOCK Meaning and
Definition
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Opening stock refers to the quantity and value of goods or merchandise that a company has on hand at the start of a specific accounting period, typically a fiscal year. It represents the inventory or stock that a business has carried forward from the previous accounting period and has not yet been sold or used. The opening stock is an important component of a company's financial records as it affects the calculation of cost of goods sold (COGS) and ultimately affects the overall profitability of the business.
Opening stock is typically recorded on the balance sheet as an asset under the category of current assets. It is valued at the cost price or market value, whichever is lower, and is usually determined by conducting a physical count or estimation of the inventory. The quantity and value of the opening stock are essential for accurate financial reporting and analysis, enabling businesses to determine their gross profit and make informed decisions about inventory management, pricing, and future sales projections.
Changes in the opening stock are typically driven by factors such as the sales volume, production levels, purchasing cycles, and inventory management practices of a company. As goods are sold or used during the accounting period, the opening stock is gradually reduced until it reaches zero at the end of the period when the closing stock is determined.
Common Misspellings for OPENING STOCK
- ipening stock
- kpening stock
- lpening stock
- ppening stock
- 0pening stock
- 9pening stock
- ooening stock
- olening stock
- o-ening stock
- o0ening stock
- opwning stock
- opsning stock
- opdning stock
- oprning stock
- op4ning stock
- op3ning stock
- opebing stock
- opeming stock
- opejing stock
- opehing stock
Etymology of OPENING STOCK
The word "opening stock" is a term commonly used in accounting and business to refer to the inventory or stock of goods and products that a company has at the beginning of a particular accounting period or financial year.
The etymology of the word "opening stock" is relatively straightforward. It is derived from the combination of two words: "opening" and "stock".
1. Opening: The word "opening" is the present participle of the verb "open". It comes from the Old English word "openian" and has remained relatively unchanged in meaning throughout its history. "Opening" refers to the act of beginning or initializing something, often used to describe the start of a particular period, process, or event.
2. Stock: The word "stock" originally comes from the Old English word "stoc" or "stocc", meaning "trunk of a tree" or "wooden post".
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