Question

What is thedefinition of traiding accountsand loss account?

Answer 1

Trading account: trading account is anominal account.It is a part of profit and loss account.All direct expenses are recorded or debited to trading account.

Profit and loss account: profit and loss account is a nominal account.It is continuation of trading account.All indirect expenses are debited or recorded to profit and loss account.Profit and loss account shows net profit or net loss.