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- To calculate a trading account, you need to123:
- Start with the opening balance of stock and place it as the first item on the debit side.
- Calculate the net purchases of the period (purchases – returns) and record them on the debit side as the next item.
- Record all direct expenses, such as wages, carriage, freight, fuel, etc.
- Calculate the net sales of the period (sales – returns) and record them on the credit side as the first item.
- Place the closing balance of stock on the credit side as the next item.
- Subtract the cost of goods sold (opening stock + net purchases – closing stock) from net sales to calculate gross profit.
Learn more:✕This summary was generated using AI based on multiple online sources. To view the original source information, use the "Learn more" links.How to Prepare a Trading A/c?
- Start with the opening balance of stock and place it as the first item on the debit side.
- Calculate the net purchases of the period (purchases – returns) and record them on the debit side as the next item.
www.accountingcapital.com/basic-accounting/tradi…In the trading account, the cost of goods sold is subtracted from net sales for the period to calculate gross profit. Only direct revenue and direct expenses are considered in it. Trading account is prepared mainly to know the profitability of the goods bought by the businessman.www.toppr.com/guides/accountancy/financial-state…Trading Account
- Explanation This account comprises items directly related to trading, i.e., net sales + closing stock minus opening stock + net purchases + direct expenses = gross profit or gross loss. ...
- Gross Profit or Gross Loss ...
www.financestrategists.com/accounting/final-accou… - People also ask
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This accountcomprises items directly related to trading, i.e., net sales + closing stock minus opening stock+ net purchases + direct expenses = gross profit or gross loss. If the net sales + closing stock value is more than the opening stock, net purchases, and direct expenses, the difference is gross profit. If … See more
Thetrading accountshows the result of buying and selling goods. This account determines the gross profit or the gross loss of a trader at the stage of final accountspreparation. The following items usually appear on the debit and creditsides of a … See more
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