Opening Stock
Also called: opening inventory
What is Opening Stock?
Opening stock is the quantity and value of inventory held at the start of an accounting period. It equals the previous period's closing stock and is the first term in the cost of goods sold calculation.
Why Opening Stock matters
Opening stock anchors the entire period's cost of sales. If last month's count was wrong, this month's gross profit is wrong too, in the opposite direction.
Opening Stock formula
COGS = Opening stock + Purchases − Closing stock
Opening stock of a period is always the closing stock of the one before.
How Opening Stock works in practice
Carry it forward from the closing count rather than re-estimating it, and value it on the same basis every period — weighted average or FIFO — so the comparison holds.
Frequently asked questions
Do a full count now and treat it as the opening balance; the first period after that will be the first accurate one.