Gross profit or gross loss revealed by trading account is transferred to:

Balance Sheet

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Profit and Loss Account

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Manufacturing Account

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Profit and Loss Appropriation Account

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Solution

The correct option is B Profit and Loss Account
Profit and loss account calculate net profit or net loss. It takes into account operating and non operating expenses and revenues, during an accounting period. It is prepared after the trading account. The balance of trading account i.e. gross profit or gross loss is transferred to this account which acts as initial point of this account.

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Similar questions

State whether the following statement are true or false.

1. Final Accounts are prepared on the basis of Trial Balance.
2. Trading Account is a part of Profit & Loss Account.
3. Profit Loss Account is prepared to find out Gross Profit or Gross Loss.
4. Gross Profit or Gross Loss is transferred to Balance Sheet.
5. An amount of net profit is added to the capital.
6. All indirect expenses are debited to trading account.
7. Balance Sheet is a statement and not an account.
8. Capital account is a personal account.
9. Amount of prepaid expenses appears on assets side.
10. Bank Overdraft is a liability of business concern.

Trading & Profit & loss account and balance sheet is prepared from:

Q. All expense and _______accounts appearing in the trial balance are transferred to the trading and profit and loss account.

Q. Which are the accounts which are not balanced but transferred to Trading A/c or Profit &loss A/c?

Q. Steps of preparing Final Accounts is -
(a) Trading Account
(b) Profit and Loss Account
(c) Balance Sheet

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