Question

Present liability of uncertain amount, which can be measured reliably, is termed as __________.

• A. Provision
• B. Liability
• C. Contingent liability
• D. None of the above

Answer 1

Answer: (A)

Provision

Provision means "any amount written off or retained by way of providing for depreciation in the value of assets or retained by way of providing for any known liability of which the amount cannot be determined with substantial accuracy."