Chapter 41~The Trading Account

Question 1

Cost of sales?

Answer 1

The total amount it cost the firm to produce the amount of goods they actually sold

Question 2

Stocktaking?

Answer 2

Counting the amount of stock that a firm has at a particular time

Question 3

3 reasons for sales returns/purchase returns

Answer 3

1. The item was faulty
2. They were damaged while delivering
3. Not the good they ordered

Question 4

5 steps of the stocktaking procedure

Answer 4

1) warehouse closed
2) warehouse divided and 2 people per each section
3) 1 member counts/ 1 member records and takes not on damaged or bad selling items
4) stock sheets checked and returned to person in charge
5) total value of all stock and report written up

Question 5

What is IT’s use in stocktaking?

Answer 5

Computer can adjust level when an item is sold

Question 6

Gross profit/gross loss?

Answer 6

The difference between the total amount of sales and the difference between the amount it costed to purchase the items