Class XI Accountancy: Provisions and Reserves

EnthusiasticNirvana avatar
EnthusiasticNirvana
·

Start Quiz

Study Flashcards

14 Questions

What is the purpose of making provisions and reserves in a business?

To protect the business from risks and uncertainties

Which of the following is considered as a provision in a business?

Provision for doubtful debts

How are provisions shown in the financial statement?

By deduction from the concerned asset on the asset side

What is the purpose of creating a provision for depreciation?

To account for the reduction in the value of fixed assets over time

Where are provisions typically shown on the balance sheet?

On the liability side, along with current liabilities

Which of the following is NOT an example of a provision in a business?

Provision for future expansion

What is the purpose of creating reserves in a business?

To strengthen the financial position of the business and meet future contingencies

Where are reserves typically shown in the Balance Sheet?

On the liability side as an appropriation of profit

What is the main difference between a general reserve and a specific reserve?

General reserve has a specified purpose, whereas specific reserve can be used for any purpose

Which type of reserve can be utilized for any purpose?

General Reserve

What is the primary source of revenue for creating revenue reserves?

Operating activities of the business

Which type of reserve is not available for distribution as dividend?

Capital Reserve

What is the impact of a provision on taxable profits?

It reduces taxable profits

Which type of reserve has no specified purpose?

General Reserve

Learn about provisions and reserves in the context of business risks and uncertainties. Understand the importance of making provisions and reserves to protect the business from adverse events.

Make Your Own Quizzes and Flashcards

Convert your notes into interactive study material.

Get started for free

More Quizzes Like This

Use Quizgecko on...
Browser
Browser