Tcs confidential

TCS Confidential
10 Copyright @ 2020 Tata Consultancy Services Limited
Subsequent month Let us now pass this entry for May – 2019 such that the stock value reduced. Consider the closing stock fetched from the aforementioned report reduced from Rs. 1.2 Crores on 30 April to Rs. 90,00,000/-. Hence, in order to pass this effect of reduction of Rs. 30 Lakh, we will pass the Stock entry on 31-05-2019 asunder On Approval, the JV header appears which shows the debit and credit effect of the stock:
Account Description
Debit Amount
Credit Amount
Retained Earnings (Dr) Stock Asset RM (Cr The above effect implies a decrease in profit (as closing stock is lesser than opening stock.

TCS Confidential
11 Copyright @ 2020 Tata Consultancy Services Limited EFFECT IN THE FINANCIAL STATEMENTS



Profit and loss account Let us compare the profit and loss account run for one month and two months. Below screenshot provides a view of the Profit and Loss account run from 01-04-2019 to 30-04-2019:
Mr. XYZ: Ok Mr. iON, I have understood the procedure. Pls showcase the effect in the financial statements.
Mr. iON: Sure sir.

TCS Confidential
12 Copyright @ 2020 Tata Consultancy Services Limited Below screenshot provides a view of the Profit and Loss account run from 01-04-
2019 to 31-05-2020: As can be observed, the system increased profit by 20 Lakh in month of April and reduced the same by 30 lakh in May, the net effect, being loss of Rs. 10 lakh can be seen in the current PL account as of 31 May.

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