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प्रश्न
Why provision for doubtful debts is not deducted from debtors while calculating ‘Debtors Turnover Ratio’?
अति संक्षिप्त उत्तर
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उत्तर
Provisions for doubtful debts are not deducted from debtors when calculating the debtor turnover ratio because the ratio shows how efficiently credit sales are collected. Deducting the provision would reduce debtors wrongly. So, gross debtors are taken, not net debtors.
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