alleryTrading Account is prepared mainly to ascertain:
AGross profit for the year
BNet profit for the year
CCash balance at year end
DOutstanding expenses owed
Answer & Solution
Correct answer: A. Gross profit for the year
1. Trading Account compares sales with cost of goods sold and direct expenses.
2. The balancing figure is Gross Profit (or Gross Loss).
3. Net Profit is computed in the Profit and Loss Account afterwards.
_Source: ICAI BoS Foundation Paper 1, Ch 7 U1 "Final Accounts", §1.3 ¶1_
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