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Question

Objective type questions :-
Answer in one sentence only.

State the meaning of debit balance of Trading Account.

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Solution

Debit balance of Trading Account implies the gross loss suffered as a result of the trading activities of a business. If the amount of sales falls short in comparison to the amount of purchases and expenses directly connected with such purchases, the difference figure is termed as gross loss, i.e. showing debit balance of Trading Account.

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