Trading account, Accounting Standards

Assignment Help:

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.


Related Discussions:- Trading account

Securities and exchange commission, Formed under the Securities and Exchang...

Formed under the Securities and Exchange Act of 1934 the SEC (Securities and Exchange Commission) is a government agency that administers important acts dealing with the interstate

Net purchases, These comprise goods purchased only for production and selli...

These comprise goods purchased only for production and selling purposes. Goods utilized as assets and not for sale are not comprised in this head. Net purchase is the dissimilarity

Difference between trading and profit and loss account, 1. Trading account ...

1. Trading account is prepared so as to calculate gross profit or loss, whereas the function of the profit and loss account is to disclose net profit or loss. 2. Trading account

Payable.., how many tipe of accounts

how many tipe of accounts

What do you mean by accounting environment, Q. What do you mean by Accounti...

Q. What do you mean by Accounting Environment? Record keeping in an accounting sense is deliberation to have begun about 4000 BCE. The control, record-keeping, and verification

Depreciation, If I sold aan asset before its matured perid what will be it'...

If I sold aan asset before its matured perid what will be it''s Depreciation schedule?

Imputed interest, Imputed Interest - If no interest or an unrealistic amoun...

Imputed Interest - If no interest or an unrealistic amount of interest is charged in a salve involving certain kinds of deferred payments, then transaction would be treated as if r

Exploration costs, are exploration costs assets to Mining companies?

are exploration costs assets to Mining companies?

Trading account, Trading account is ready to ascertain the Gross Profit and...

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 tradin

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd