Trading and profit and loss account

Chloe, Lily, and Emma are running a small business. They are preparing their trading and profit and loss account. When should they prepare this account?

• For a particular period, such as a quarter or a year

• On a particular date, such as the end of the month

• For the whole year, regardless of their business cycle

• None of these

Addison started a small business and at the end of the year, she calculated her accounts. She found that her debit exceeded her credit in her profit and loss account. This situation is called

• Net profit

• Net loss

• Gross profit

• Gross loss

Priya, Avery, and Mira are running a small business. From the following, choose what would be considered as their current assets.

• Cash

• Stock

• Debtors

• All of these

Addison, Eesha, and Emily are running a small business. They are trying to understand their financial statements. Where would they find 'Salaries and wages' in their trial balance?

• On the debit side of their trading account

• On the debit side of their Profit and Loss account

• On the asset side of their balance sheet

• On the liabilities side of their balance sheet

Amen has started a small business and he is preparing his trading account. What is the main reason for him to do this?

• To determine his gross profit

• To calculate his net profit

• To find out his balance of capital

• To understand his financial position

Lucas, Isabella, and Zoey are running a small business. They are trying to understand their financial statements. Where would they find the depreciation for the current year in their trial balance?

• On the debit side of their profit and loss account and it is deducted from the particular asset in the balance sheet

• On the asset side of their balance sheet as a deduction from the concerned asset

• On the debit side of their profit and loss account

• On the debit side of their trading account

Harper, Ella, and Henry are running a small business. They are trying to figure out where to transfer their indirect expenses. Where should they transfer these expenses to?

• Their Trading account

• Their Profit and loss account

• Their Balance sheet

Mager started a small business and he is trying to understand where to record his employees' wages and salaries. Can you help him identify where wages and salaries account is shown?

• Trading account

• Profit and loss account

• Balance sheet

• Trading account and balance sheet

Charlotte runs a small business and she records carriage outward in her trading account. Is this correct?

• True

• False

Aiden started a small business and he believes that his Profit and Loss account will show the financial position of his entity. Is this statement correct?

• True

• False