For me it's a credit purchases, I've seen credit to sales. Now to me, this isn't wrong but surely this will distort all sorts of ratios. Is this not a way to massage the figures?
__________________
Johnny - Owner of an overly-active keyboard.
A man who can read, yet doesn't, is in no way wiser than a man who can't.
I think where you've seen credit to sales, the accountant probably took the view that the goods shouldn't have been introduced (or bought by) the business; so in other words the ratio's are thrown out by their presence.
Agreed with your usual treatment of Credit Purchases - Debit drawings for an unincorporated trade.
Hey,
Well it's a sort of and or either really - either directly or indirectly. My logic is a owner (or other) could inflate their figures by making credit to sales - admittedly, most which would be taken would more than likely be immaterial to the accounts. To me, credit to sales, which as far as I can see, is not a definite no go, it just leaves the opportunity to potentially inflate figures. Just a thought I had. Thanks
__________________
Johnny - Owner of an overly-active keyboard.
A man who can read, yet doesn't, is in no way wiser than a man who can't.
