Trading Account - A trading account is designed to show the gross profit on trading, i.e., the total
excess of the amount charged for goods sold over their purchase price together with any expense
attendant on their acquisition. The purpose is to show the amount of purchases, sales, returns to
creditors, and the expenses attending same.  Shows the elements of net principal income. (Cole.)
The merchandise (or trading) account of a mercantile company, designed to show gross profit on
trading. It includes freight.