Trading Account Vs. Profit And Loss Account

(i)    Trading account is prepared to calculate the gross profit (or loss), while the function of the profit and loss account is to disclose net profit.

(ii)    Trading account deals with the sales and cost of the goods sold which includes the direct expenses. But the profit and loss account deals with indirect expenses such as administrative, selling and distribution expenses and the like and the same are charges against the gross profit and other revenues.

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