Multiple choice

Trading Account is prepared to ascertain

  1. operating profit

  2. net profit

  3. cost of goods nanufactured

  4. gross profit

Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The Trading Account is specifically prepared to calculate gross profit, which is the difference between sales revenue and the cost of goods sold. It does not account for operating expenses, which are considered in the Profit & Loss Account to determine net profit.