Provision can be created for __________.
Provision can be created for __________.
The correct option is C All of the above
A provision is an amount that you put in
aside in your accounts to cover a future liability.
The purpose of a provision is to make a current year’s balance more accurate,
as there may be costs which could, to some extent, be accounted for in either
the current or previous financial year. These costs that distinctly belong to a
specific year could be misleading if accounted for in the future.
A provision is not a form of saving, even though it is an amount that is put
aside for a future plausible cost or obligation. Provisions resulting impact is
a reduction in the company's equity.
When accounting, provisions are recognized on the balance sheet and then
expensed on the income statement.
Provision can be created for any of the foloowing:
1. Current assets
2. Liabilities and assets
3. Valuation adjustment for fixed asset
A provision is an amount that you put in
aside in your accounts to cover a future liability.
The purpose of a provision is to make a current year’s balance more accurate,
as there may be costs which could, to some extent, be accounted for in either
the current or previous financial year. These costs that distinctly belong to a
specific year could be misleading if accounted for in the future.
A provision is not a form of saving, even though it is an amount that is put
aside for a future plausible cost or obligation. Provisions resulting impact is
a reduction in the company's equity.
When accounting, provisions are recognized on the balance sheet and then
expensed on the income statement.
Provision can be created for any of the foloowing:
1. Current assets
2. Liabilities and assets
3. Valuation adjustment for fixed asset
