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4 cards from this section. Quick, good the night before a test.
What is the purpose of a trading account?
Think about how businesses evaluate their primary sales performance.
Define net profit.
It’s the bottom line on the profit and loss account.
What is the primary purpose of the trading account?
Think about which account relates directly to sales performance.
True or False: The balance sheet shows the net profit of a business.
Consider what a balance sheet represents.
A company starts with a cash sales revenue of ₹150,000, and its opening stock is ₹20,000. They make purchases totaling ₹70,000 and have closing stock of ₹30,000. Calculate the gross profit.
Use the gross profit formula and substitute the values.
If a business records indirect expenses totaling ₹18,000 and finds a gross profit of ₹45,000, what will be the net profit for the business?
Directly subtract indirect expenses from gross profit.
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