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JAMB Principles of Accounts 2014 Question 17

Question 17

Final Accounts of a Sole Trader

The major focus of the trading account is to show

  1. A.net profit.
  2. B.gross margin.
  3. C.total purchases.
  4. D.total sales.
Show the answer and explanation

Answer: B (gross margin.)

Explanation

The trading account compares sales with cost of sales to find gross profit (gross margin).