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GROSS PROFIT A/C
Accountancy
Sir, In your video lecture of final accounts of profit organizations, the balancing figure that we arrived in trading a/c you mentioned as GROSS PROFIT c/d. But in the Journal entry you put it as TRADING A/C Dr To GROSS PROFIT A/C, IF the journal entry is like this , why do we mention " TO GROSS PROFIT c/d "in the trading a/c. It should have been "GROSS PROFIT A/C" . In the same way, in the profit and loss a/c it is shown us " BY GROSS PROFIT b/d" , but in the journal entry sir says that GROSS PROFIT A/C DR. TO PROFIT AND LOSS A/C. If the journal entry is like above , then in the Profit and Loss a/c, it should have been shown us " GROOS PROFIT A/C" but we show it as" GROSS PROFIT c/d". Could you please explain the reason for this difference sir. "GROSS PROFIT A/C
Answers (5)
Profit / loss is computed in 2 step process - trading account shows gross profit or loss and P&L shows the net profit or loss and they are prepared in continuation - and the gross profit computed in trading a/c is carried down to P&L to know the net profit / loss.
Sudha Reddy
Profit / loss is computed in 2 step process - trading account shows gross profit or loss and P&L shows the net profit or loss and they are prepared in continuation - and the gross profit computed in trading a/c is carried down to P&L to know the net profit / loss.
Sir, I am not so clear about your answer. I think you are not clear about my question. I am asking you when we prepare trading account (If the credit side is more ) the balancing figure should be shown as " To Gross Profit C/d" or " To Gross Profit A/c" or " To Profit and Loss A/c" . Why I am asking you this, in one of the video lectures, sir shows it as " To Gross Profit A/c" ( Is there any account called " Gross Profit A/c" ?"), in another video sir shows it as " To Gross Profit C/d" . In some of the accountancy books , it shows as " To Profit and Loss a/c" ( i.e instead of showing balancing figure of Trading a/c as" To Gross Profit C/d" or "To Gross Profit A/C"). Sir, among these which one is correct ? Please guide me sir.
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