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Trading Account is an account which is prepared to determine the gross profit or gross loss of a business concern.


i) Closing stock
ii) sales and sales return
iii) purchase related expenses
iv) factory or manufacturing expenses
v) Purchase returns
vi) opening stock
vii) Carriage inward
viii) Wages



Discount is an allowance or concession in price. Discount is given so that the buyer is induced (lured) to place an order and later to make payment in time.

(i)Lower Business Costs. A significant trade discount advantage is the small business’ ability to lower operational business costs.
(ii) Increase Purchasing Power.
(iii) Improve Goodwill.
(iv) Higher Consumer Sales.

(i)Attracting New and Repeat Customers.
(ii)Increase Sales Across the Board.
(iii)Free Up Room in Your Store.
(iv)Meet Sales Goals.

Bright future




End of year adjustments are journal entries made to various general ledger accounts at the end of the
fiscal year , to create a set of books that is in compliance with the applicable accounting framework

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Depreciation refers to two aspects of the same concept: The decrease in value of assets The allocation of the cost of assets to periods in which the assets are used. Depreciation is a method of reallocating the cost of a tangible asset over its useful life span of it being in motion.

(<<<pick any two>>>)

(i) To Calculate the True Profits
(ii) To show true Financial Position
(iii) To make Provision for replacement of assets
(iv) To have some Incidental advantage
(v) To have Tax advantage

_Fixed Instalment
fixed installment method of depreciation the amount of depreciation each year is fixed and equal. At the end of each year, a fixed amount is removed from the book value of the asset concerned and charged to profit and loss account (or income statement ).

This is the oldest and most commonly used method of depreciation. Here a fixed amount of depreciation is charged every year during the lifetime of the machine. There at the end of its useful life, the value of the asset will be zero. This is also known as straight-line method or original cost method.

Dimishing Balance:
Diminishing balance depreciation method is one of the three
depreciation methods that mention in IAS 16. This kind of
depreciation method is said to be high charged at the first period, and then subsequently reduce.
This is because the charging rate is applying to the Net Book Value of Assets and the Net Book Value of Assets is reduce from time to time after charging depreciation.




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