What kind of balance does provisions and reserves have? Why?

Open in App

Solution

Tridibesh, Provisions and Reserves are made out of the profits of the business. So, they have credit balance.
All those items which have credit balance are shown on the Liability side of the Balance Sheet. Therefore, Provision and Reserves will appear on the Liabilities side of the Balance Sheet.

Suggest Corrections

Similar questions

Q. Why does the author have reservations about the utility of the Milan Conference?

Q. What would have happened if the provision of reservation was not there in the constitution?

Q. After making provision for claim if any, balance of workmen's compensation reserve is distributed among ___ partners in their ___ ratio:

Give four examples each of provision and reserves.

What are the provisions for the reservations for the socially disadvantaged groups as per the 73rd amendment? Explain how these provisions have changed the profile of the leadership at the village level.

Join BYJU'S Learning Program

What kind of balance does provisions and reserves have? Why?

Tridibesh, Provisions and Reserves are made out of the profits of the business. So, they have credit balance. All those items which have credit balance are shown on the Liability side of the Balance Sheet. Therefore, Provision and Reserves will appear on the Liabilities side of the Balance Sheet.

Tridibesh, Provisions and Reserves are made out of the profits of the business. So, they have credit balance.
All those items which have credit balance are shown on the Liability side of the Balance Sheet. Therefore, Provision and Reserves will appear on the Liabilities side of the Balance Sheet.