Financial Statements of a Company · Class 12 · CBSE · Commerce Accountancy
Which of the following is classified as a 'Short-term Provision' in a company's Balance Sheet?
Practice question from Financial Statements of a Company (Class 12 · CBSE · Commerce Accountancy), with the correct answer and a step-by-step solution.
medium · MCQ · Q-7BE562
Which of the following is classified as a 'Short-term Provision' in a company's Balance Sheet?
- A.Provision for Employee Benefits
- B.Provision for TaxCorrect answer
- C.General Reserve
- D.Capital Redemption Reserve
Solution
Provision for Tax is created against current year profits or expected tax liability due within the operating cycle or 12 months, making it a Short-term Provision under Current Liabilities.
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