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WAEC Financial Accounting 1996 Question 15

Question 15

Final Accounts of a Sole Trader

The purpose of a Trading Account is to ascertain

  1. A.sales
  2. B.gross profit or loss
  3. C.net profit or loss
  4. D.Carriage outwards
  5. E.appropriated profit.
Show the answer and explanation

Answer: B (gross profit or loss)

Explanation

The trading account compares sales with the cost of goods sold to find gross profit or loss.