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Computers are so powerful that in an accounting program it is possible to balance all the ledger accounts in fractions of seconds.
Preparing trading and profit and loss account. Ad Get the Most Out of Your Investment. This account is prepared to arrive at the figure of revenue earned or loss incurred during a period. Sign up for a Free Trial Today.
Preparation of Profit and Loss Account The profit and loss account is prepared by closing the trading account expense accounts and other income accounts using a closing journal entry. Computing the net income for the period. Preparing Trading and Profit and Loss and Balance Sheet.
Ad Get Help From Expert. Create an Account in Minutes and Take Control of What You Can Do at Risk. It determines the gross profit or gross loss of the concern for that accounting year.
If we make a trial balance after having prepared the Trading and Profit Loss ac we will find only real and personal accounts in it apart from the nominal account Trading and Profit Loss ac. The Trading and Profit Loss ac is also a nominal account and has a credit balance if there is a profit and a debit balance if there is a loss. Open a Demo Account in 5 min.
In computerised accounting the journal entries relating to preparation of Trading and Profit and Loss account are programmatically recorded. For determining the true result or the net result of the business preparing the Trading and Profit and Loss account. Create an Account in Minutes and Take Control of What You Can Do at Risk.
For determining the true result or the net result of the business preparing the Trading and Profit and Loss account is necessary. Prepare the trading and profit and loss account of the business for the year ended 31122005 and a balance sheet as at that date. Let us understand the trading account and profit and loss account in detail.
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