In case you are a student of accounts, I believe you must be aware of multiple types of accounts that a business prepares to keep a record of their financial transactions throughout. As you can guess that keeping a track record of all these transactions happening in business is foremost important to maintain a transparent structure and also to get a fair understanding of growth prospects. With manuals as trading account homework answers, you can get a detailed idea of this whole structure.
Among all these business accounts, trading account is also one of them holding a paramount importance in any business. Trading account is an initial step when you are on the way to prepare a final account that includes profit and loss account and the balance sheet later on.
Letâ€™s start with basic concept that what exactly trading account means? And what are special features of the trading account?
What is trading account?Â Â Â
Trading account is a sort of nominal account that every business prepares to determine the gross profit earned and gross loss suffered throughout an accounting year from trading activities. This trading account is primary step in preparing final account and is prepared when an accounting year ends.
Trading account basically comprises of two sides that are â€˜debitâ€™ and â€˜credit.’ On the debit side, we have all direct expenses,and on the credit side, all direct income is kept. Trading account sheet mainly represents the buying of goods, selling of goods and also costs associated with day to day operations of the firm.
Henceforth, trading account for any firm is significantly important while final account is prepared in order to determine the difference between the selling price of goods and cost price of goods, on the basis of which a firm can know whether they earned a profit or incurred loss.
Some aspects of trading account to keep in mind
- Trading account is a very first step in preparing final account statement, which includes trading account, profit and loss account and balance sheet.
- Trading account is particularly prepared at the end of every fiscal year.
- Trading account is prepared only taking in consideration directs cost and direct income of any business throughout the accounting year.
- On the debit side, direct revenue is recorded while on the credit side direct expenses are recorded.
- All things of direct costs and direct income in regard to current year are considered however no things identifying with past or coming year are taken into consideration.
- If credit side of trading account surpasses, then it represents the gross profit and if in case debit side surpasses that shows gross
- The balance amount of this trading account is then carried to profit and loss account, which constitutes the next step in final account statement.
The points listed above are some vital aspects of trading account,and students who are learning trading account must remember these points by heart.
Problem faced in completing trading account homework answers
Trading account though seems to constitute a very small part of final account statement, still holds a lot of importance. Also for students learning this topic, proper understanding of each and every concept is required to excel in trading account homework answers.
The major problem students use to face in trading account homework answer is while preparing the trading account sheet as it requires accurately distributing all the entries on the debit side and credit side to get authentic results.
Although it is not that difficult thing to place entries if you are aware of all the basic criteria of trading account. But still, to be proficient in this topic you need a constant practice and proper attention.
So, if you are finding this topic a little problematic and if you are not able to cope up with your trading account homework answers by own, then I am here to suggest you an excellent platform which will not only provide you expert guidance rather will also help you completing your trading account homework answers with ease.
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Some prominent attributes of online learning
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Traditional coaching, on one hand, requires students to attend class on specified timings,online education provides flexible timings options for students,and they can opt for classes schedule as per them.
This attribute of online education where students have the flexibility to choose classes timings and attending classes from comfort of their home makes its unique mode of learning.As it is quite clear that students can take these classes from their home in observation of their parents, because of this parents can also keep a check on their childrenâ€™s progress and suggest improvement too.
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Some points to consider
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