What is Opening Stock?
Opening Stock
The quantity that was present at the start of the period.
What it means
Beginning inventory is inventory on hand on the first day of a period, such as a month or week. The ending inventory from the previous period becomes the starting inventory for this period.
When you first start using the system, the quantity in the warehouse at that time is counted and added to basic inventory.
At the pen factory
On the first day that the ballpoint pen factory started using the system, 40 pieces of black refill were in the warehouse. The "Base" section of the stock ledger says 40.
Why it matters
If the starting number is wrong, all calculations after that will be wrong.