Cash Flow Statement
This query is : Resolved
Prathamesh
(Querist)
29 October 2009
In CFS, we figure out the changes in working capital during the year.
for eg. where the Debtors have increased, we show it as a (less) item.but i'm confused as to why to show it as (less) because in this case cash is neither coming in nor going out of the business, where in reality 'Goods' are being sold.
for eg. where the Debtors have increased, we show it as a (less) item.but i'm confused as to why to show it as (less) because in this case cash is neither coming in nor going out of the business, where in reality 'Goods' are being sold.
Rahul Vora
(Expert)
30 October 2009
Whenever debtors increase, it means that more cash is invested in the business, so indirectly it is an outflow of cash. And so, it is shown as a (less) item in CFS. Debtors increase when goods are sold to them. How do you get these goods ? By investing i.e. manufacturing these goods. There is an outflow of cash.
Hope, it is clear to you.
CA Rahul Vora
Hope, it is clear to you.
CA Rahul Vora
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Gst credit note by supplier
- Due date for filing return for the partner in partnership subjected to Tax Audit
- Missed uploading GST Invoice
- Query on effect of registration of property
- GST on reimbursement of expenses
- Equity Share Sale and Purchase
- Wrong CMPo8 file
- Goodwill transfer of deceased father’s firm – ICAI applying a 27.04.2026 cut-off to the 3 year limit
- Additional trade name
- Number of years as per AS amortisation of Goodwill
- Opting out" of regime provided under subsection (1A) of Section 115BAC but Form 10IEA is not filed.
- "Please ensure that the Total of the Deductions u/s 54F match the same in Table D in Sch CG"
- Need to correct "Whether it is last installment " response in Form 26 QB
- " Income from House Property " in joint names of co-owners
- REGARDING TDS RETURN OF FORM 27Q
- Notice under e-Verification Scheme
- GST demand notice for ITC reversal against exempted supply.
- RCM ON SECURITY CHARGES FROM INDIVIDUALS
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
