1.

Give three differences between Trading Account and Profit and Loss Account.

Answer»
BasisTrading AccountProfit and Loss Account
RelationIt is a part of the Profit and Loss AccountProfit and loss is the main Account
NatureTrading Account is prepared to ascertain Gross profit or Gross Loss.Profit and loss Account is prepared to ascertain Net Profit or Net Loss.
Transfer of BalanceBalance of Trading Account is transferred to Profit & Loss Account.Balance of Profit & Loss Account is transferred to Capital Account of the Proprietor.



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