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Managerial remuneration
Accountancy
For calculating the managerial remuneration, should provison for doubts debts be added or deducted from the Net profit. If so added or deducted,what is the reason?
Answers (2)
Best Answer
Provision for doubtful debt should be deducted from net profit as it is of revenue nature and is because of negligence of management If it is not so reduced management may increase sales to persons who are not capable of repayment hence it should be reduced from profits to calculate managerial remuneration.
