Match List – I with List – II for the difference between debit side and credit side of account.
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LIST I |
LIST II |
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A. Gross loss |
I. Total of the credit side of the profit and loss |
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B. Gross profit |
II. Total of the debit side of the profit and loss |
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C. Net profit |
III. Total of the credit side of the trading account |
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D. Net loss |
IV. Total of the debit side of the trading account |
Choose the correct answer from the options given below :
Answer & explanation
Correct answer: option 4
The correct answer is option 4- A-IV, B-III, C-I, D-II.
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LIST I |
LIST II |
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A. Gross loss |
IV. Total of the debit side of the trading account |
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B. Gross profit |
III. Total of the credit side of the trading account
|
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C. Net profit |
I. Total of the credit side of the profit and loss
|
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D. Net loss |
II. Total of the debit side of the profit and loss |
The trading and profit and loss can be seen as combination of two accounts, viz. Trading account and Profit and Loss account. The trading account or the first part ascertains the gross profit and profit and loss account or the second part ascertains net profit. If the debit side is excess of credit in trading account, then this is gross loss and vice versa. The gross profit or gross loss is transferred to profit and loss account to determine the net profit or net loss. If the credit side is more than the debit side then there is net profit and vice versa.