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In this tutorial, Chris from Adapt Tuition explains how to prepare the trading account in an income statement. The trading account reflects the gross profit from trading activities. While people generally start businesses to make a profit, there are also non-profit organizations. The primary focus here is on profit-making businesses, where individuals buy items and resell them. Chris emphasizes a simple formula for calculating profit: selling price minus cost price. This foundational concept underpins the trading account, helping to illustrate the financial results of trading activities effectively.