Note
This help article is meant for processing transactions for running entities that run small case businesses and that require to produce a Trading Operating statement with the “Gross profit/Loss from trading activities” displayed separately.
For Entities that do Share or other types of Investment trading transactions please see Share Trading Entities.
Instructions
| From the Main Toolbar, go to Accounting. |
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| Select Chart of accounts from the list. |
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In the chart of accounts, you would need to create custom accounts and select the relevant tax labels for the following types of trading accounts
| Account | Account Type | Tax label | Secondary label |
| Sales | Income | Other Sales of Goods And Services | Leave Blank |
| Opening Stock | Expense | Cost of Sales | Opening Inventories |
| Closing Stock | Expense | Cost of Sales | Closing Inventories |
| Purchases | Expense | Cost of Sales | Purchases |
| Other Cost of Sales Expenses | Expense | Cost of Sales | Leave Blank |
To create an account, from the Chart of Accounts screen, select Add Account and select Other.
Tax Labels Screen
The Tax labels and secondary labels for the accounts can also be selected in the Tax labels screen.
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From the Main Toolbar, go to Compliance. |
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Select Period Compliance. |
Select
For more, see Tax Labels for Companies and Tax Labels for Trusts
The accounts set with the above tax labels and secondary labels will be reflected in the Operating Statement - Trading Entities report as shown below
Please Note:
- Multiple “Opening Stock” and “Closing Stock” accounts will be displayed as one line in the “Operating Statement - Trading Entities” report
- Multiple “Purchase” accounts if set as separate “Normal” accounts in the Chart of accounts will then be displayed as separate line items in the “Operating Statement - Trading Entities” report
- Multiple “Purchase” accounts if set as separate “Sub- Account” in the Chart of accounts will then be displayed as a one line item in the “Operating Statement - Trading Entities” report
Processing Stock transactions
You could use any Asset type account to create “Stock on Hand” accounts in the Ledger
- At the Start of the year you would need to process a journal to “Credit” the “Stock on Hand” Account(s) and then “Debit” the “Opening Stock” account
- At the End of the year you would need to Process a Journal to “Debit” the “Stock on Hand” Account(S) and then “Credit” the “Closing Stock” Account