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Question

Provision for dividend is shown in ____________.

A
profit and loss appropriation A/c
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B
profit and loss A/c
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C
share capital A/c
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D
profit and loss adjustment A/c
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Solution

The correct option is A profit and loss appropriation A/c
An appropriation is something that is created only when there are profits. Likewise dividends are declared only when there are profits. Hence, an appropriation is shown in the profit and loss appropriation account.

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