Explain the purpose of a Trading Profit and Los... - JSS3 Business studies Trading, profit and loss account Question

The purpose of a Trading, Profit, and Loss Account is to summarize the financial performance of a business over a specific period, typically a fiscal quarter or year. The Trading Account focuses on direct expenses and revenues related to core operations, such as sales, purchases, and cost of goods sold. The Profit and Loss Account summarizes all revenues and expenses, including operating and non-operating items, to calculate the net profit or loss. For example, sales revenue, opening and closing stock values, purchases, and other direct expenses would be recorded in the Trading Account, while operating expenses, non-operating income, and non-operating expenses would be included in the Profit and Loss Account.