The balance of which of the following accounts do not disappear, once they are debited/credited to Trading Account?
Correct answer: D. Closing stock
- A. Sales
- B. Purchases
- C. Inward returns
- D. Closing stock
Explanation
Sales, purchases and inward returns are transferred to the Trading Account and their balances close at year-end. Closing stock remains an asset carried forward to the next accounting period, so its balance does not disappear.
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About Financial Statements
Financial statements present a business's financial performance and position through the income statement, statement of financial position, cash flow statement and changes in equity. Questions involve preparing and interpreting these statements, adjusting entries, depreciation, closing inventory, accrued and prepaid items, and distinguishing profit from cash flow.
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