Trading Account

Trading account is prepared to

• Calculate gross profit

• Calculate profit for the year

• Calculate all the incomes and expenses

• Calculate all the assets and liabilities

Income earned from normal business activities are

• Sales returns

• Purchases

• Revenue

• Purchases returns

Revenue is referred to as

• Profit

• Sales turnover

• Gross profit

• Sales returns

How is revenue calculated?

• Output / Selling price

• Output + Selling price

• Output x Selling price

• Output - Selling price

Net revenue is

• Revenue - Sales return

• Revenue + Sales return

• Revenue + Purchases return

• Revenue - Purchases return

How is cost of sales calculated?

• Opening inventory - Purchases + Closing Inventory

• Opening inventory + Purchases + Closing Inventory

• Opening inventory - Purchases - Closing Inventory

• Opening inventory + Purchases - Closing Inventory

Carriage inwards is

• Added to purchases

• Subtracted from purchases

• Added to revenue

• Subtracted from revenue

Sales return occurs when

• Suppliers sell goods to the business

• Customers return goods to the business

• Business return goods bought from suppliers

• Business return goods sold by suppliers

Purchases return occurs when

• Business sell goods to customers

• Customers return goods to the business

• Business return goods bought from suppliers

• Customers return goods sold by business

How is gross profit calculated

• Opening inventory + Purchases - Closing inventory

• Revenue - Sales return

• Revenue - Cost of sales

• Sales return + Cost of sales