Credit Side of Trading Account Explained

The important of credit side of trading account are explained in brief as follows:

Sales and Sales Returns
The sales includes the amount of goods sold which have either been manufactured by the firm or in which had been purchased for resale. Returns of goods sold should be deducted from the amount of sales in the Trading account.


Image Source:

Closing Stock


It consists of raw materials, work-in-progress, semi finished and finished goods. This figure will not be available from the trial balance and will be shown as an adjustment outside the trail balance. Closing stock represents goods in hand with the business at the close of the accounting period. This figure is always shown twice in final account once in trading account and then in the assets side of Balance Sheet. Unsold goods on consignment must be shown in closing stock.

If goods which are sold on sale or return basis must be added in closing stick while valuating the closing stock, market price or cost price whichever is less is to be taken into consideration.

Kata Mutiara Kata Kata Mutiara Kata Kata Lucu Kata Mutiara Makanan Sehat Resep Masakan Kata Motivasi obat perangsang wanita