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Chapter 2
The statement of profit or loss makes use of the two elements of the financial
statements not used in the preparation of the statement of financial position.
Income Expenses
Income is the inflow of economic Expenses are the outflow of economic
benefits to an entity over a period of benefits from an entity over a period of
time. This will consist of sales revenue time. This may include the using of
generated on goods and services sold resources such as heat and light,
to customers, but may also include wages and salaries or office expenses.
other items such as interest received or Expenses are incurred by a business
dividends received. entity to help it generate economic
benefits.
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