Stock

This records the value of goods held for resale or use in production that haven't yet been sold or consumed. As an asset it normally carries a debit balance, increasing as stock is purchased or produced and decreasing as it's sold or used.

Real-world examples

Retail and wholesale

A homeware retailer's core balance sheet asset is the goods bought in for resale — mugs, textiles, kitchenware — bought from various suppliers and held until sold. There's no production process, so 1001 (Stock) is usually the only stock code a retailer needs: nothing has to be split into raw materials, work in progress or finished goods the way a manufacturer's would. A delivery of £2,400 of new-season stock is a debit of £2,400 to 1001, with the credit going to 2100 (Creditors Control Account) or, if paid on delivery, straight to 1200 (Bank).

Manufacturing

A manufacturer that also buys in finished trading goods to sell alongside its own output — spare parts from a third-party supplier, say — uses 1001 for those bought-in items specifically, keeping them separate from 1002-1004, which track the value added by its own production process. The distinction matters for margin reporting: bought-in goods carry a thinner, purely mark-up-based margin, while self-manufactured stock reflects labour and overhead absorbed along the way.

Service business

A consultancy or software business typically has no physical stock at all — nothing bought in for resale, nothing held for future sale. Code 1001 exists in the default chart of accounts template but usually carries a nil balance throughout the year; if it's ever used, it's more likely to hold a small quantity of branded merchandise than anything central to the business.

Commonly confused with

Because code 1002 (Work in Progress) sits right next to this one in Current Assets, it's a common mis-posting target. Code 1001 is specifically for stock, while 1002 covers work in progress — similar in nature, but keeping them separate is what makes the current assets section of your management accounts meaningful rather than a single lumped total.

What a mis-posting here costs you

Because Stock sits within Current Assets, an error here overstates or understates working capital on the balance sheet rather than affecting reported profit — it won't move the bottom line, but it can make the business look more, or less, liquid than it actually is.

Other codes in Current Assets