Closing Entries

Like ledger accounts, trading account will be closed by transferring the gross profit or gross loss to the profit and loss account.

i. If gross profit
Trading A/c………….                                Dr	x x x
To profit and loss account                                                                                                                                                            (Gross Profit transferred to Profit and loss A/c)		x x x
ii. If gross loss.
Profit and loss A/c………                                    Dr	x x x
To Trading A/c		x x x
(Gross Loss transferred to Profit and loss A/c)