A trading account is prepared to disclose the
-
A.
net profile or loss for the year -
B.
gross profit or loss for the year -
C.
accumulated fund for the year -
D.
gross profit on manufacturing
Correct Answer: Option B
Explanation
The purpose of the profit and loss account is to: Show whether a business has made a PROFIT or LOSS over a financial year. It describe how the profit or loss arose – e.g. categorizing costs between “cost of sales” and operating costs.