Question on: JSS3 Business studies - Trading, profit and loss account
Consider the sample transactions provided in the previous section. Construct a table to record these transactions in a simple format, and explain how each transaction would impact the Trading Account and Profit and Loss Account of a business.
- Sample Transactions Table:
|
Date |
Transaction Description |
Amount (₦) |
Impact on Trading Account |
Impact on Profit and Loss Account |
|
Jan 1 |
Purchased goods |
10,000 |
Increases Purchases |
No impact |
|
Jan 5 |
Sold goods |
15,000 |
Increases Sales |
No impact |
|
Jan 10 |
Purchased more goods |
5,000 |
Increases Purchases |
No impact |
|
Jan 31 |
Closing stock valued |
8,000 |
No impact |
Increases Closing Stock |
In this table, each transaction impacts the Trading Account by affecting purchases, sales, or closing stock values. However, none of these transactions directly impact the Profit and Loss Account, as they do not involve operating or non-operating expenses or revenue
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