Trading account is one of the most useful income statements inclusive of financial statements to find out a company’s gross profit or gross loss. In this account, expenses done in favor to purchase raw materials and other direct expenses are included.

One must find out about the direct expenses such as those to acquire goods or raw materials. In order to continue production this part is most important.Those are:

  • Expense as carriage fare
  • Payment for transportation (inward)
  • All types of local taxes
  • All other multiple fares for gathering necessary goods

After gathering all necessary goods for production, expenses are done for the next part i.e. the manufacturing of goods:

  • Expenses to acquire necessary fuels
  • Wages and salaries for the labors
  • Expenses to keep an ongoing production
  • Multiple other factory expenses
  • Cost in order to maintain the quality for consumption
  • Power and energy to complete the task.


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