Question

While preparing a fund flow statement the provision for taxation should be taken as a/an _______________.

• A. current liability
• B. appropriation of profit
• C. Either (A) or (B)
• D. None of these

Answer 1

The correct option is C Either (A) or (B)

Provision for taxation can be treated in two ways while preparing the fund flow statement:

1. Provision for taxation can be treated as current liability

2. Provision for taxation can be taken as appropriation of profit.