In this post, I will discuss about “what is Trading Account”.
What is Trading Account
- The trading account is for the period of financial year i.e. 1st April to 31st March.
- We get important information about business from business accounts.
- At the beginning of the financial year i.e. how much stock of goods do we have at the beginning of the year i.e. how much of the goods is left from last year?
- Financial year i.e. how much goods did we purchase throughout the year?
- Financial year i.e. how many goods did we sell throughout the year?
- At the end of the financial year i.e. at the end of the year, how much stock of goods do you have, i.e. how much goods are left to be sold?
- Apart from these, information about how much gross profit we earned in the financial year i.e. the entire year is also available from the business account.
- Those who have done accounting work by hand have studied commerce or are students know very well how difficult it is to prepare business accounts at the end of the year.
- But in Tele Praham we do not need to create a business account.
- The trading account is created automatically by Tele Prime.
- In Tally Prime, the Trading Account is a part of the Profit and Loss Account.
There are especially some ledger groups in Tele Prime that have a direct impact on the trading account or in simple words we can say that due to these groups, the trading account is prepared which are given below.
- Purchase account
- Sales account
- Direct expenses
- Direct Income
- Stock in hand
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