Trading
Trading & Profit & Loss A/c - deals with Revenue & Expense
Trading Account - deals with Gross Profit (π) or Gross Loss
Profit & Loss - deals with Net Profit (π) or Net Loss
Balance Sheet - deals with Assets, Liabilities & Capital
Direct Revenue & Direct Expense - deals with the Trading A/c
Indirect Revenue & Indirect Expense - deals with the Profit & Loss A/c
The Accounting Period - is generally a quarter or a year and reflects all of the financial activity that occurred during that time. However, it should be noted that even though accounting periods tend to be generically similar and encompass a like amount of time.
The trading & Profit & Loss A/c and the Balance Sheet - represent the final accounts of a sole trader. The trading & profit & loss A/c are prepared with balances of expenses and revenues.
Revenue A/c & Expenses A/c - are called temporary accounts because they are only relevant to one accounting period.
The Trading A/c - the purpose of the trading A/c is to calculate the Gross Profit (π) or Gross Loss.
The Gross Profit (π) - is the revenue remaining after the cost of sales or the cost of goods sold has been deducted from the sales figure.
The Gross Loss - is when the cost of goods sold exceeds the sales revenue.
The Profit and Loss A/c - is to calculate the net profit (π) of the business.
The Net Profit (π) - is basically revenue remaining after the business operating expenses has been deducted from the gross profit (π).
The Net Loss - is the result that occurs when expenses exceed the income or total revenue produced for a given period of time.
The Balance sheet - is a financial statement which shows the assets of a business in relation to its liabilities and capital at a particular date. In other words the balance sheet is a detailed expression of the accounting equation.
Direct Expense - are expenses that are linked to the purchase of goods.
Direct Revenue - results directly from the sale of goods.
Indirect Expense - is not
Trading Account - deals with Gross Profit (π) or Gross Loss
Profit & Loss - deals with Net Profit (π) or Net Loss
Balance Sheet - deals with Assets, Liabilities & Capital
Direct Revenue & Direct Expense - deals with the Trading A/c
Indirect Revenue & Indirect Expense - deals with the Profit & Loss A/c
The Accounting Period - is generally a quarter or a year and reflects all of the financial activity that occurred during that time. However, it should be noted that even though accounting periods tend to be generically similar and encompass a like amount of time.
The trading & Profit & Loss A/c and the Balance Sheet - represent the final accounts of a sole trader. The trading & profit & loss A/c are prepared with balances of expenses and revenues.
Revenue A/c & Expenses A/c - are called temporary accounts because they are only relevant to one accounting period.
The Trading A/c - the purpose of the trading A/c is to calculate the Gross Profit (π) or Gross Loss.
The Gross Profit (π) - is the revenue remaining after the cost of sales or the cost of goods sold has been deducted from the sales figure.
The Gross Loss - is when the cost of goods sold exceeds the sales revenue.
The Profit and Loss A/c - is to calculate the net profit (π) of the business.
The Net Profit (π) - is basically revenue remaining after the business operating expenses has been deducted from the gross profit (π).
The Net Loss - is the result that occurs when expenses exceed the income or total revenue produced for a given period of time.
The Balance sheet - is a financial statement which shows the assets of a business in relation to its liabilities and capital at a particular date. In other words the balance sheet is a detailed expression of the accounting equation.
Direct Expense - are expenses that are linked to the purchase of goods.
Direct Revenue - results directly from the sale of goods.
Indirect Expense - is not