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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.
Prepaid Expenses In many conditions, like a custom, some of the item of expenses is generally paid in advance such as rent, taxes, insurance and subscriptions. The rationale of
i buy machine 70% cash 30% installments.i have charged 100% cost to asset and capital so when i pay first installment i debit installment expense and credit bank so my question is
Consisting mainly of accounting educators the American Accounting Association (AAA) has sought to encourage research and study at a theoretical level into the concepts or standards
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
payment made to vendor but rejected by bank
The Opening Stock of goods is the stock of goods in hand at the start of an accounting year. It may contain stock of raw material, work-in-progress and finished goods. It appears i
the books of deven verma could not be tallied.
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The subsequent items are debited in the profit and loss account as: 1. Administrative expenses comprising office salaries, office lighting, office rent, printing, director's fee
describe why a high stock turnover is considered to be a good thing
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