Trading Account Is A _______Account

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A trading account is an investment account used to place buy or sell orders in the stock market. A trading account functions in the same way as your current bank account.

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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.

Q. From the following balances extracted from the books of Sh. Badri Vishal on 31st March, 2017, prepare a Trading Account, P & L A/c and a Balance Sheet. Closing Stock valued on that date was ₹ 15,000.

	Dr. (₹)	Cr. (₹)
Capital		1,28,200
Household Expenses	10,000
Sales		1,80,000
Return inwards	4,000
Return outwards		6,000
Purchases	1,50,000
Cash at Shop	1,600
Bank Overdraft		15,000
Interest on Overdraft	1,500
Creditors		17,800
Stock at the Commencement	18,000
Freight	8,500
Rent and Taxes	7,000
Debtors	32,600
Commission	3,000	2,200
Freehold property	30,000
Sundry expenses	3,900
Salaries and wages	20,000
Life Insurance Premium	1,800
Insurance Premium	1,600
Motor Vehicle	39,800
Typewriter	8,000
Interest		800
Carriage inwards	2,000
Carriage outwards	800
Power	2,200
Audit Fee	1,700
Lighting	2,000
	3,50,000	3,50,000

Write the word, term, phrase, Which can substitute each of the following statement.

1) Transfer of a Journal entry from Journal to ledger.
2) Total of Debit side of an A/c is more than total of Credit side of an A/c.
3) Page number of ledger.
4) A book of an account in which all ledger accounts are maintained.
5) Left hand side of an account.
6) Right hand side of an account.
7) Types of accounts which are not balanced but transferred to Trading A/c or Profit & Loss A/c.
8) Bound book of accounts.
9) An account where total of Purchases Book is posted.
10) A statement of accounts prepared from the balances of ledger account.

Q. From the following Trial Balance extracted from the books of Sh. Pawan Kumar, prepare a Trading Account, Profit & Loss Account for the year ended 31st March, 2014 and a Balance Sheet as at that date :

Dr. Balances	(₹)	Cr. Balances	(₹)
Drawings	1,20,000	Capital	16,00,000
Plant and Machinery	12,00,000	Creditors	2,60,000
Horses and Carts	2,60,000	Sales	8,20,000
Debtors	3,40,000	Bills Payable	2,21,200
Purchases	2,00,000	Interest on Ram's Loan	1,800
Wages	80,000	Rent Received	12,000
Cash at Bank	2,60,000
Salaries	80,000
Repairs	5,000
Stock (1-4-2013)	7,000
Stock (31-3-2014)	92,000
Rent	45,000
Manufacturing expenses	15,000
Bad-Debts	50,000
Carriage	15,000
Income Tax	20,000
Life Insurance Premium	30,000
Loan to Ram at 12% p.a.	20,000
Insurance	12,000
Insurance Prepaid	1,000
	29,15,000		29,15,000

Adjustments:-
1. Plant and Machinery includes a new machinery purchased on 1st October, 2013 for ₹ 2,00,000.
2. Depreciate Plant and Machinery by 10% p.a. and Horses and Carts by 20% p.a.
3. Salaries for the month of February and March 2014 are outstanding.
4. Goods worth ₹ 15,000 were sold and dispatched on 27th March but no entry was passed to this effect.
5. Make a provision for Doubtful Debts at 5% on Debtors.

Q. Trading account is a _________ account.

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Trading Account Is A _______Account

A trading account is an investment account used to place buy or sell orders in the stock market. A trading account functions in the same way as your current bank account. Explore more such questions and answers at BYJU’S.

A trading account is an investment account used to place buy or sell orders in the stock market. A trading account functions in the same way as your current bank account.

Explore more such questions and answers at BYJU’S.