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  2. A trading account is an online investment account that traders use to purchase securities and monitor trades. It allows investors to buy and sell securities such as shares, commodities, foreign exchange, etc., in the public market.
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    In a trading concern, purchases are the expenses of buying finished goods to sell them further. Suppose any of these purchased goods are returned to the supplier. In that case, the corresponding amount is titled as ‘purchase returns’ or ‘returns outward,’ and is subtracted from purchases to obtain net purchases.
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  3. People also ask
    What is the purpose of a trading account?The purpose of the trading account is to show the gross profit or gross loss made in a particular time period. The following are some key points to understand about a trading account: It is a temporary account that records sales and purchases of goods/services.
    What is a trading account example?Example Solution Trading Account FAQs What Is a Trading Account? The trading account shows 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 accounts preparation. The following items usually appear on the debit and credit sides of a trading account.
    What is a trading account in merchandising?It is normally prepared by a merchandising concern which purchases and sells the goods during a particular period. The trading account shows the gross profit or gross loss during the accounting period. Trading account is based on matching the selling price of goods and services with the cost of goods sold and services rendered.
    What is a trading account balance?The balance of the trading account indicates the gross profit or gross loss. Credit balance represents a gross profit, while debit balance represents a gross loss. Finally, in a trading account, gross profit or gross loss is transferred to the profit or loss account.
     
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    WEBA trading account is used to record the sale and purchase of goods/services. This temporary account closes at the end of each …

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      WEBJan 31, 2024 · What Is a Trading Account? The trading account shows 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 accounts …

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