Trading, profit and loss account

Business Studies J.S.S 3 Second Term

WEEK 8

Trading, profit and loss account

Performance Objectives

Students should be able to:

    1. State the purpose of trading, profit and loss accounts.

    2. Calculate the cost of goods sold.

    3. Determine net sales.

    4. Determine net profit or loss and gross profit.

    5. Outline the rules for the construction of a simple Profit and Loss account.

Content

Purpose of trading, profit and loss account

The purpose of the profit and loss account is to:

1. Show whether a business has made a profit or loss over a financial year.

2. Describe how the profit or loss arose e.g. categorising costs between "cost of sales" and operating costs.

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