A trading account is appropriate in any case where a business buys and sells goods, for example a shopkeeper. A trading account is not appropriate where only services are provided, for example a taxi driver. Where the purchase of goods is an incidental part of providing a service a trading account is not necessary, although one may be sent in.
A plumber has to buy many kinds of materials for his job, such as pipes, fittings, solder. He may arrange with his customers to buy pieces of equipment, for example a boiler, which he supplies and fixes. Although his customers would pay for the cost of these and there may be some profit, that is not the main function of his job, and he may choose not to show this in a separate trading account. All his business activities would then be shown in a profit and loss account. If he sells any materials for the purchaser to use or resell, a trading account is required.
