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A stock account should be kept. This stock account is only ever used at the end of an accounting period, when the business counts up and values the stock in hand at the end of a period in a physical stock take. Accounting treatment: (a) When a stock-take is made, the business will have a value for its closing stock and the double entry is: Debit: Stock account ( closing stock value) $XX Credit: Trading account $XX (b) Closing stock at the end of one period becomes opening stock at the start of the next perod. The accounts remains unchanged until the end of the next period, when the value of opening stock is then taken to the trading account: Debit: Trading account $XX Credit: Stock account (value of opening stock) $XX |