5 Questions
Explain the purpose of the Parcels Return column in a trading account.
The Parcels Return column in a trading account indicates the average cost or ineword of the items sold.
What is recorded in the Reverse Sales column of a trading account?
The returned item for each sale is recorded in the Reverse Sales column of a trading account.
What does the ineword column represent in a trading account?
The ineword column, also known as the Return Inward column, records the cost of the returned item.
How is the Net Sales column calculated in a trading account?
The Net Sales column is calculated by subtracting the Reverse Sales from the Sales column in a trading account.
What type of expenses are recorded in the Direct Expenses column of a trading account?
Expenses like commission and other direct expenses are recorded in the Direct Expenses column of a trading account.
Study Notes
- People in the last class of the WhatsApp Evergreen Backchannel discussed the financial statement of a Manali Trading Account today.
- The discussion focused on understanding the format of the trading account and the items it contains.
- They began by examining the Opening Stock column and the Own Position column in the account, followed by the Parcels column where Mines and Returns are calculated.
- The Parcels Return column is also referred to as the Return Outward column, and it indicates the average cost or ineword of the items sold.
- Next, Sales Inner column is filled with the sales made, and for each sale, the returned item will also be recorded in the Reverse Sales column.
- ineword refers to the Return Inward column, where the cost or ineword of the returned item is recorded.
- The Net Sales column is calculated by subtracting the Reverse Sales from the Sales column.
- The Direct Expenses column is where expenses like commission and other direct expenses are recorded.
- The account holders are advised to keep track of these columns and their values to understand their trading position.
In this video, we will focus solely on understanding the format of a trading account, and examine the items included in it such as opening and closing stock, purchases, sales, and profit and loss account. Join us to gain insights into the structure of a trading account.
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