Accounting for merchandising inventories using periodical system.?

G

George

New member
Should I close actual inventory sum on inventories account before or after preparing Statement of Financial position (balance sheet).?
How is that arranged by accounting standards?
 
If you are sure that the ending balance is correct and that there will not be any adjusting entries, then close the account prior to the statement being completed.

If you are running a preliminary statement to check balances, leave the account open until the amounts are verified.
 
Inventory is an asset account, that means it's a permanent account. It is not closed at the end of the accounting period. Only nominal (temporary) accounts such as revenues, expenses, dividends and owner draws are closed at he end of the accounting cycle.
 
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