Items which are shown at the Debit side of Trading Account:
1. Opening Stock: This is the closing stock of the previous year.
2. Purchases: This is the total of cash and credit purchases made during the year.
3. Purchases Return: The goods which are returned back from purchased goods are called purchase return. This amount is deducted from the number of purchases.
4. Direct Expenses: These are the expenses which are essential for undertaking the work of production or for the procurement of goods such as octroi, freight, cartage, wages, power, collect.
Items which are shown at the Credit side of Trading Account:
1. Sales: This is the total of cash and credit sales made during the year.
2. Sales Return: The goods which are returned by the customers due to some reasons are known as sales return. The value of these goods is deducted from the number of sales.
3. Closing Stock: The goods which remain unsold at the end of the financial year is called closing stock. This stock of goods is valued at cost price or market price whichever is less.
