CBSE · Class 11 · Accountancy · Depreciation, Provisions and ReservesWhat is a provision?
Step-by-Step Solution
A provision is an amount retained by way of providing for any known liability, the amount of which cannot be determined with substantial accuracy.
Detailed Options Breakdown
Option : Appropriation of profit
Incorrect choice. This distractor represents a common misunderstanding of the core principles of Depreciation, Provisions and Reserves.
Option 1: Charge against profit (Correct Answer)
Correct choice. Refer to the step-by-step verified solution guidelines above for details.
Option 2: General reserve
Incorrect choice. This distractor represents a common misunderstanding of the core principles of Depreciation, Provisions and Reserves.
Option 3: Capital reserve
Incorrect choice. This distractor represents a common misunderstanding of the core principles of Depreciation, Provisions and Reserves.
💡 Study Guide: This question tests core syllabus concepts from Depreciation, Provisions and Reserves. For formulas, key summaries, and mock exam reference guides, read the full Depreciation, Provisions and Reserves Revision Notes.