Question

balancing figure of trading a/c is net profit or net loss
correct and rewrite the sentence ​

Answer 1

Answer:

Balancing figure of Trading Account is gross profit or gross loss.

Answer 2

The correct and rewritten answer is: Balancing figure of a Trading A/C can be Gross Profit or Gross Loss.

Let's see what is a Trading A/C and why the balancing figure is not mentioned as net profit or net loss:

• A trading A/C is used to record the trading activities of a business that involves buying and selling.
• Trading A/C is the first account that is to be prepared in a Final Accounts Statement.
• It is used to ascertain the Gross profit or Gross loss of a business which is then carried to the Profit and Loss A/c.
• The Net Profit or Net Loss is ascertained from the Profit and Loss A/C of the Financial Statement.