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Questions and Answers
Explain the purpose of the Parcels Return column in a trading account.
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?
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?
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?
How is the Net Sales column calculated in a trading account?
What type of expenses are recorded in the Direct Expenses column of a trading account?
What type of expenses are recorded in the Direct Expenses column of a trading account?
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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.
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