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Chapter 2

Statement of profit or loss

5.1 Basic format of statement of profit or loss

The statement of profit or loss is a summary of the income and expenses of an entity
for a period of time (e.g. a year) as follows:

$ $
Sales X
Less: Cost of goods sold (X)
–––
Gross Profit X
Less Expenses:
Rent X
Van running costs X
Staff wages X
Other expenses X
––– (X)
–––
Net profit for the year X
–––

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