Q.The main purpose of preparing a Trading Account is to ascertain the:

The Trading Account deals only with the buying-and-selling side of the business, before any other incomes or indirect expenses are considered.

Option (b) is correct. The Trading Account is prepared specifically to compare Net Sales against the Cost of Goods Sold (Opening Stock + Purchases + Direct Expenses − Closing Stock), and its balancing figure is exactly the Gross Profit or Gross Loss of the business. Option (a) is wrong: Net Profit or Net Loss is found only after Gross Profit is carried forward into the Profit and Loss Account, where indirect expenses and other incomes are also brought in. Option (c) is wrong: the financial position (what the business owns and owes) is shown by the Balance Sheet, a separate statement, not the Trading Account. Option (d) is wrong: the proprietor's capital appears in the Balance Sheet, adjusted by net profit/loss and drawings — it is not what the Trading Account itself calculates.

Confusing the Trading Account's Gross Profit with the Profit and Loss Account's Net Profit — the two are different figures found in two different, sequential statements.