Question

Select the most appropriate alternative from those given below:
Credit balance of Trading Account indicates ________ .

• A. Gross Profit
• B. Gross Loss
• C. Net Loss
• D. Net Profit

Answer 1

The correct option is A Gross Profit

Gross Profit is a profit which is generated from direct business activity of the firm. Excess of income over expenditure in trading account is called as gross profit.

Trading Account

Particulars Amount Particulars Amount

To Opening Stock 10000 By Sales 60000

To Purchases 35000 By Closing Stock 15000

To Wages 10000

To Direct Expenses 8000

To Gross Profit 12000

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75000 75000

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