A trading account is a financial statement showing the
1) income from sales
2) the cost of those sales
and
3) the gross profit arising during the period of that
account.
This means that, in the case of a business mainly concerned
with buying and selling, the value and cost of stock is shown as
well as the income received from sales. The gross profit is the
excess of the income from sales over the cost of the goods sold. A
deduction can be made for the difference between opening and
closing stock
Stock at beginning 2,000 Sales during period 70,000
Cost of purchases Stock in hand at
during period 57,000 end of period 1,800
Total 59,000 Total 71,800
Difference (gross profit) 12,800
