Free, AI-curated practice for the Trading Profit Loss and Balance Sheet section of SSC CGL. We have 15+ verified questions in this bank. Below: 5 sample questions. Sign up free to unlock unlimited practice + AI explanations + per-topic analytics.
Trading Account is the first statement prepared to calculate Gross Profit. It records all transactions related to buying and selling of goods. Think of it as the 'shop counter' — it shows what you bought, what you sold, and what profit you made on goods alone (before expenses). It starts with Opening Stock, adds Purchases, deducts Closing Stock, and arrives at Cost of Goods Sold (COGS). The difference between Sales and COGS is Gross Profit. This account does NOT include operating expenses like rent, salary, or advertising — those go into P&L.
Opening Stock 10,000 | Purchases 50,000 | Sales 80,000 | Closing Stock 8,000 | Freight Inward 2,000. Gross Profit = 80,000 - (10,000 + 50,000 + 2,000 - 8,000) = 80,000 - 54,000 = 26,000.
If Opening Stock 5,000, Purchases 30,000, Direct Expenses 3,000, Closing Stock 6,000, Sales 50,000. COGS = 5,000 + 30,000 + 3,000 - 6,000 = 32,000. Gross Profit = 50,000 - 32,000 = 18,000.
P&L Account (also called Income Statement) is prepared AFTER Trading Account. It takes Gross Profit from Trading A/C and deducts all operating expenses (indirect expenses) to arrive at Net Profit. Operating expenses include rent, salaries, insurance, depreciation, office supplies, advertising, and bad debts. The P&L also includes non-operating items like interest received, commission earned, loss on sale of assets. Net Profit is the final profit available to the owner after all costs and expenses.
Gross Profit 26,000 | Salaries 5,000 | Rent 2,000 | Insurance 1,000 | Depreciation 1,500 | Interest Received 500. Net Profit = 26,000 - (5,000 + 2,000 + 1,000 + 1,500) + 500 = 26,000 - 9,500 + 500 = 17,000.
Gross Profit 50,000 | Office Expenses 3,000 | Bad Debts 2,000 | Discount Allowed 1,500 | Commission Earned 2,000. Net Profit = 50,000 - (3,000 + 2,000 + 1,500) + 2,000 = 50,000 - 6,500 + 2,000 = 45,500.
Balance Sheet is a snapshot of financial position on a specific date. It lists what the business owns (Assets), what it owes (Liabilities), and what the owner has invested (Capital). The fundamental equation is Assets = Liabilities + Capital. Assets are divided into Fixed Assets (land, building, machinery — long-term) and Current Assets (cash, stock, debtors — short-term). Liabilities are divided into Fixed Liabilities (long-term loans) and Current Liabilities (creditors, short-term payables). Closing Stock from Trading A/C appears as a Current Asset in Balance Sheet.
Opening Capital 100,000 | Net Profit 20,000 | Drawings 5,000 | Closing Capital = 100,000 + 20,000 - 5,000 = 115,000. If Total Assets = 200,000, then Total Liabilities = 200,000 - 115,000 = 85,000.
Assets: Cash 10,000 + Debtors 15,000 + Stock 25,000 + Machinery 80,000 = 130,000. Liabilities: Creditors 20,000 + Loan 15,000 = 35,000. Capital = 130,000 - 35,000 = 95,000.
SSC exams often test adjustments made while preparing final accounts. These include depreciation (reduces asset value and increases expense), closing stock (reduces COGS in Trading A/C, appears as asset in Balance Sheet), bad debts (expense in P&L), accrued expenses (liability in Balance Sheet), prepaid expenses (asset in Balance Sheet), and outstanding liabilities. Understanding where each adjustment appears is critical. For example, depreciation is BOTH an expense in P&L AND a deduction from the asset in Balance Sheet.
Daily 10-Q quiz · AI doubt solver in Hindi + English · adaptive mocks · 49,000+ practice questions (19,000+ verified PYQs).