Provisions and Reserves

Provision is created by debiting

• Profit and Loss Account

• Trading Account Trading Account

• Profit and Loss Appropriation Account

• None of these

Reserve is created by debiting

• Trading Account

• Profit & Loss Account

• Profit & Loss Appropriation Account

• None of these

Undistributed part of reserves can be distributed as dividend.

• True

• False

Provision is shown in balance sheet as;

• A. Current Liability

• B. Deduction from the asset

• Both A & B

• Either A or B

Which of the following is a charge against profit?

• A. Reserve

• B. Provision

• Both A & B

• None of these

Which of the following is an appropriation of profit?

• Provision for Doubtful Debts

• Provision for Depreciation

• General Reserve

• All of the above