The objective of a trading account is to establish the?
Question 1 Report
The objective of a trading account is to establish the?
Answer Details
The objective of a trading account is to establish the gross profit earned or loss incurred by a business during a particular accounting period. It shows the direct expenses incurred in relation to the goods sold and the revenue earned from the sale of goods. Gross profit is calculated by subtracting the cost of goods sold from the net sales revenue. By subtracting other indirect expenses like operating expenses, taxes, and interest from gross profit, the net profit or loss of the business can be determined. Therefore, the correct option is "gross profit".
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