# Inventory accounting using Opening Stock + Purchases - Closing Stock

**URL:** <https://forum.manager.io/t/inventory-accounting-using-opening-stock-purchases-closing-stock/5252>\
**Category:** Uncategorized\
**Created:** [April 4, 2016, 3:19pm UTC](https://forum.manager.io/t/inventory-accounting-using-opening-stock-purchases-closing-stock/5252 "2016-04-04T15:19:51Z")\
**Posts on this page:** 1\
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**Author:** ![Brucanna](https://sea1.discourse-cdn.com/flex019/user_avatar/forum.manager.io/brucanna/32/1960_2.png) [@Brucanna](https://forum.manager.io/u/Brucanna)\
**Post date:** [April 5, 2016, 3:48pm UTC](https://forum.manager.io/t/inventory-accounting-using-opening-stock-purchases-closing-stock/5252/17 "2016-04-05T15:48:16Z")

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OK - things can be setup as you requested but you need to delete any Inventory Item transactions and then un-tick the Inventory Item tab under customise. Also you need to have entered a date under Settings - Start Date.

In the BS Asset section you create “one” account called Stock on Hand (NOTE: **do not** create separate opening/closing stock accounts in the BS). To enter the opening stock value go to Settings - Chart of Accounts and click "Edit: next to Stock on Hand, then click Starting Balance and enter a value & Update.

![](https://us1.discourse-cdn.com/flex019/uploads/manager1/original/2X/b/b2abff4543c8bce4ff1e882bfbb3396ca8794bde.jpg)

Next you create your P&L Chart of Accounts to reflect the Gross Profit as illustrated below

![](https://us1.discourse-cdn.com/flex019/uploads/manager1/original/2X/7/78403b3b062393b50f690fa01c7a7939174912a2.jpg) ![](https://us1.discourse-cdn.com/flex019/uploads/manager1/original/2X/5/53e787948930e540b755e1c92463f720b6db328f.jpg)

Noting the following 1) Cost of Sales is a new group, 2) Gross Profit is a new total and 3) the light grey numbers are the codes used to get the layout/structure correct.

Throughout the accounting period you allocated all purchases to the Purchases account. The P&L Opening/Closing Stock accounts are “only” used to make any valuations adjustments at the end of the accounting period and the Journal would be with the P&L showing:

 ![](https://us1.discourse-cdn.com/flex019/uploads/manager1/original/2X/f/f5a4bfff284aaf56b149031c3d95690a2a34ca51.jpg)

![](https://us1.discourse-cdn.com/flex019/uploads/manager1/original/2X/6/62ad08f31536cfe919387a67cc66d7b338f4aeb8.jpg)

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