Trading account is prepared by a firm to record all it's income and expenses to find out the profit or loss attained during the year.
Nominal accounts are the ones which records all incomes and expenses to find out net profit or loss. Thus, trading account is a type of nominal account because it matches all the conditions of any nominal account.
Steps of preparing Final Accounts is - (a) Trading Account (b) Profit and Loss Account (c) Balance Sheet
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Q5
XYZ club has a bar that maintains a separate trading account for its trading activities. Which of the following is the treatment of profit or loss on bar trading activities ?