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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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The account value, also known as total equity, is the total dollar value of all the holdings of the trading account; not just the securities, but the cash as well. This figure is calculated by adding the total amount of cash in the account and the current market value of all the securities and then … See more
The cash value, also referred to as the cash balance value, is the total amount of actual money—the most liquidof funds—in the account. This figure is the amount that is available for … See more
The final figure, purchasing power or buying power, is the total amount available to the investor to purchase securities. This amount overlaps to … See more
The Securities and Exchange Commission(SEC) limits the value of stocks that an investor can purchase using margin. That limit is two times the equity in the margin account. … See more
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