Working Capital Mgt. Unit 1

Financial Management

Illustration 3 of ICAI Mat For calculating debtors, why cost of sales is taken? From my point of view, Debtors pay sales price. So, full sales amount should be taken rather than cost of sales.

Ishika Goel 282

CA Final

★ 3K+

12-Mar-22 21:29

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Answers (1)

Cost of sales is considered because that is what the company has invested. Please note that both views are acceptable - sales as well as cost of sales. If however, cost of sales is available, we prefer that.

CA Suraj Lakhotia

Admin

13-Mar-22 12:52