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Terminologies Used In Trading Account - SS1 Accounting Past Questions and Answers - page 1

1

What does opening stock refer to in a trading account?

A

The value of inventory held at the beginning of a trading period

B

The value of inventory held at the end of a trading period

C

The total amount spent on purchasing inventory during a trading period

D

The total amount received from selling inventory during a trading period

correct option: a
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2

What does COGS stand for in a trading account?

A

Cost of goods sold

 

B

Cost of goods stored

C

Cost of goods shared

D

Cost of goods saved

correct option: a
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3

What is net profit in a trading account?

A

The profit earned from trading activities before deducting expenses

B

The profit earned from trading activities after deducting all expenses

C

The total amount spent on purchasing inventory during a trading period

D

The total amount received from selling inventory during a trading period

correct option: b
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4

What is gross profit in a trading account?

A

The profit earned from trading activities before deducting expenses

B

The profit earned from trading activities after deducting all expenses

C

The total amount spent on purchasing inventory during a trading period

 

D

The total amount received from selling inventory during a trading period

correct option: a
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5

What is closing stock in a trading account?

A

The value of inventory held at the end of a trading period

B

The value of inventory held at the beginning of a trading period

 

C

The total amount spent on purchasing inventory during a trading period

D

The total amount received from selling inventory during a trading period

correct option: a
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6

What is the purpose of COGS in a trading account?

The purpose of COGS or cost of goods sold, is to calculate the cost of producing or purchasing the inventory or stock that was sold during a trading period.

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7

What is the difference between gross profit and net profit in a trading account?

Gross profit is the profit earned from trading activities before deducting any expenses, while net profit is the profit earned from trading activities after deducting all expenses.

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