Trading account, Accounting Standards

Trading account is ready to ascertain the Gross Profit and Loss of a firm; here Gross Profit is the excess of total revenue over cost of goods sold as the credit side of the trading account exceeds the debit side. Likewise, Gross Loss is the excess of cost of goods sold over net revenue as the debit side of the trading account exceeds the credit side.

Gross Profit = Net Sales Revenue - Cost of Goods Sold

Gross Loss = - (Net Sales Revenue - Cost of Goods Sold) Where:

Net Sales Revenue = Cash Sales + Credit Sales - Sales Returns

Cost of Goods Sold = Opening Stock + Net Purchases + Direct Expenses - Closing Stock

Net Purchase = Cash Purchases + Credit Purchases - Purchases Returns.

Trading Account is usually prepared in 'T' form. In such case, opening stock, purchases and direct expenses are demonstrated on the debit side and sales and closing stock in the credit side of the trading account. The system of the Trading Account is illustrated with the format of Profit and Loss Account.

Posted Date: 4/3/2013 6:17:02 AM | Location : United States







Related Discussions:- Trading account, Assignment Help, Ask Question on Trading account, Get Answer, Expert's Help, Trading account Discussions

Write discussion on Trading account
Your posts are moderated
Related Questions

how many tipe of accounts

a.Compute the number of preferred shares that were issued during 20X6, which is Preferred stock, $100 par value, 10% $580,000 $500,000

Hello, I am interested in help on an ACCO 310 case which is due on Tuesday the 13th at 12 PM. Please contact me at your earliest convenience and hopefully we can work something ou

In 1973 and independent seven-member full-time Financial Accounting Standards Board (FASB) replaced the Accounting Principles Board. The FASB has published numerous Statements of F

Q. Types of business activities? An accounting education is perfect for providing this versatile background. Additionally to providing a good foundation for entrepreneurship in

explain how accounting information may be used when an owner wants to justify a price in one of their lines of house paint

QUESTION The recognition of human capital by modern businesses has led to the development of Human Resource Accounting (HRA) Required- (a) Explain the following terms-


Current Liabilities We have studied about liabilities are claims of outsiders against the business. Conversely, these are amounts owed through the business to people who have