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AS 3
Accountancy
In this question illustration 10 the changes in inventory has already been deducted from net profit. It has already has its effects on net profit. But again in answer why they have shown it under work in capital changes? Can someone please elaborate on this.
Answers (2)
Actually the concept is that when cls bal of stock is greater than its openg stock, we are having a profit and should be added with the profit. But as per our presentation principles this profit is taken in the exp side and hence is apearing as a negative fig. Form this what we can understand us our profit has got someadditions and that addition is correct and that is our profit before tax. Again in cfs inventory changes have been deducted as u said. But its considerd as changes in assets abd is abother concept. I dont know whether u get me. Its just a conceptual understanding.
