Trading account is the account showing stating the GROSS PROFIT of a business. Whereas, the Profit and Loss Account shows the NET PROFIT of a business.
Gross Profit = Sales Turnover - Cost of goods sold (opening stock+purchases+carriage inwards-closing stock).
Net Profit = Gross Profit + Revenue (rent received, interest received, discount received) - Expenses.
Gross Profit = Sales Turnover - Cost of goods sold (opening stock+purchases+carriage inwards-closing stock).
Net Profit = Gross Profit + Revenue (rent received, interest received, discount received) - Expenses.
