tax paid during the year is already deducted from profits in the statement of profit and loss then why do we deduct it again in cash flow statements?
Dear Student,
Amount of Tax is deducted from Statement of P&L , because we create a provision over there. While preparing CFS first of all such amount of provision for tax is added to amount of net profit to nullify that treatment and because it is actually paid in cash that's why it is subtracted from cash from operating activity.
Regards
Amount of Tax is deducted from Statement of P&L , because we create a provision over there. While preparing CFS first of all such amount of provision for tax is added to amount of net profit to nullify that treatment and because it is actually paid in cash that's why it is subtracted from cash from operating activity.
Regards