What Is The Difference Between Trading & Profit & Loss Account?


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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.

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