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Trading Account | Meaning | Format | Examples | Quiz
Activities which generate revenue for the business, such as Sales of Services or Goods, Closing Stock, are shown on the credit side (Right). In contrast, activities that are part of the cost of goods sold, such as purchasing raw materials, opening stock, direct expenses, etc., are shown on the debit side (Left). … See more
A trading account is used to record the sale and purchase of goods/services. This temporary account closes at the end of each accounting period. The purpose of the trading account is to show the gross profit or gross loss … See more
When preparing a trading account, closing entries are typically recorded in a journal proper. These entries transfer the balances of various … See more
- 1. Carriage inwards is debited to the trading account, whereas Carriage outw…
- 2. Gross profit can be shown with the help of an equation as well,
- 3. Return inwards are deducted from “Sales” whereas Retu… See more
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