Hello fellas. A bit off topic but does any know normally how do the accountants work out profit and loss in share trading? Do they go via the trading account such open balance and close balance for a year or do they comb through all the transaction? Thanks in advance.
Hello fellas. A bit off topic but does any know normally how do the accountants work out profit and loss in share trading? Do they go via the trading account such open balance and close balance for a year or do they comb through all the transaction? Thanks in advance.
You would go through all the transactions using either the average cost basis or specific lot. In the US they use six different methods of calculation and can change between them.PS-You don't need a separate trading account just for frequent trades.
You would go through all the transactions using either the average cost basis or specific lot. In the US they use six different methods of calculation and can change between them.PS-You don't need a separate trading account just for frequent trades.
Average cost basis meaning group the purchases of the shares say A2 then minus the share sold in that year?
Average cost basis meaning group the purchases of the shares say A2 then minus the share sold in that year?
Average cost is simply the average price of all your buys and or sells for the total number of shares in any stock you hold, think of it as a running total.
Average cost is simply the average price of all your buys and or sells for the total number of shares in any stock you hold, think of it as a running total.
If you are a trader, Couta1's advise is incorrect.
You do not and should not average the price.
Send me a private message and I'll explain it. It's simple but too lengthy for a message post on here.
If you are a trader, Couta1's advise is incorrect.
You do not and should not average the price.
Send me a private message and I'll explain it. It's simple but too lengthy for a message post on here.
Sorry but it is not incorrect, if you are buying and selling continuously then your average price is constantly changing so unless you can isolate a trading parcel as a specific lot then you would use the average cost method.PS-Either method is fine in different circumstances.
Hello fellas. A bit off topic but does any know normally how do the accountants work out profit and loss in share trading? Do they go via the trading account such open balance and close balance for a year or do they comb through all the transaction? Thanks in advance.
Look what you done now Longy ....caused a raucous on this thread anybody can agree
Must have been a hard question and maybe not one correct answer
Last edited by winner69; 31-10-2018 at 12:45 PM.
“ At the top of every bubble, everyone is convinced it's not yet a bubble.”
Look what you done now Longy ....caused a raucous on this thread anybody can agree
Must have been a hard question and maybe not one correct answer
Or we could make it a bit more complicated and throw in the following methods, FIFO(First in first off) LIFO(Last in first off) Highest cost method or Lowest cost method.Lol
Originally Posted by minimoke
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