Answer to Question #206137 in Accounting for twinkle

Question

1.    The trading account section of a manufacturing business would include:

a.     Production cost; opening stock of finished goods ; selling expenses

b.    Production cost; opening stock of finished goods; sales

c.     Production cost; closing stock of finished goods; distribution expenses

d.    Production cost; closing stock of finished goods; sales; net profit

Answer 1

Solution:

The correct answer is b. Production cost; opening stock of finished goods; sales.

 

The opening stock of finished goods is added to the production cost, which is then deducted from the sales revenue.