Question

Debit balance of Trading account shows gross profit. (State True or False)

Answer 1

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False


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Answer 2

It is true that the debit balance of Trading account shows gross profit.

Explanation:

• For preparing the balance sheet of accounting process, the preparation of the trading account is important.
• The debit side shows the gross profit and credit side shows the gross loss in the trading account.
• Preparation of Trading accounts includes the purchasing of goods, opening stock, inwards of carriage recorded in debit side and sales, closing stocks are recorded in credit side. Comparing debit and credit side to find gross profit or loss.