1. CDA COLLEGE ACC101: BOOK KEEPING 1 Lecture 3 Lecture 3 Lecturer: Kleanthis Zisimos

2. Chapter Review In Today’s Lecture we Review exercises of last lecture Review exercises of last lecture Analyze the Trading account Analyze the Trading account Examine Sales, Purchases, stock, Carriage Inwards Examine Sales, Purchases, stock, Carriage Inwards Calculate Gross Profit Calculate Gross Profit

3. Trading Account The Trading Account is a financial statement which is included in the Trading, Profit & Loss Account. The Trading Account is a financial statement which is included in the Trading, Profit & Loss Account. The Purpose of this account is to find the Gross Profit or Loss. The Purpose of this account is to find the Gross Profit or Loss. Gross Profit is the difference between Net Sales and Cost Sales Gross Profit is the difference between Net Sales and Cost Sales

4. Accounts included in the Trading The accounts included in the Trading a/c are The accounts included in the Trading a/c are 1. Stock Account. We put the amounts of opening stock and closing stock 2. Purchases a/c. The cost of the goods bought 3. Purchases returns a/c. The cost of bought goods which are returned to the supplier 4. Sales a/c. The income from sales 5. Sales returns a/c. The goods returned to the company 6. Carriage inwards a/c. The transportation of goods bought

5. Vertical Form of Trading A/c Trading A/c of ……. as at 31 December 20XX Opening Stock XSalesX PurchasesX Less Sales Ret.(X) Less Purchases ret.(X) Carriage inwards X Less Closing Stock (X) Gross Profit X XX

6. Discussion Questions Discussion question 1. Find the Gross Profit or loss A) Sales 2000, Purchases 1000, opening stock 500 A) Sales 2000, Purchases 1000, opening stock 500 B) Sales 5000, Cost of Sales 4300 B) Sales 5000, Cost of Sales 4300 C) Sales 13000, Opening stock 1000, Cost of sales 11000 C) Sales 13000, Opening stock 1000, Cost of sales 11000 D) Sales 16000, Sales returns 4000, Purchases 7000, Opening Stock 1300, Closing Stock 5000 D) Sales 16000, Sales returns 4000, Purchases 7000, Opening Stock 1300, Closing Stock 5000

7. Discussion Questions Discussion question 2. Construct the Trading a/c using the following information. Discussion question 2. Construct the Trading a/c using the following information. Sales 16000, Sales returns 4000, Purchases 7000, Opening Stock 1300, Closing Stock 5000 Sales 16000, Sales returns 4000, Purchases 7000, Opening Stock 1300, Closing Stock 5000 More exercises page 13 More exercises page 13