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 Form 4 Business Studies Online Lessons: Financial Statements

Importance of a trading account

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Answer Text:
Importance of a trading account:
-enables the business to determine the cost of goods sold during a particular trading period.
-its preparation enables the business to know whether they made a gross profit or gross loss
- it enables the business to make comparisons with different trading periods or with similar businesses
-helps management in decision making e.g whether to invest more in the business or not.


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