State with reasons whether the following are reserves or provisions:1.

1.	State with reasons whether the following are reserves or provisions:1. Provision for taxation2. Sinking fund3. Investment fluctuation fund4. Dividend equilization fund5. Employees’ Bonus fund6. Reserve for repairs and renovation7. Capital or Debenture redemption fund
Answer» 1. Provision for taxation: It is a provision because it is created from the profit and loss account. 2. Sinking fund: It is a provision because it is created from the profit and loss account. 3. Investment fluctuation fund: It is a provision because it is created from the profit and loss account. 4. Dividend equalization fund: It is a reserve because it is created from the profit and loss appropriation account. 5. Employees’ Bonus fund: It is a provision because it is created from the profit and loss account. 6. Reserve for repairs and renovation: It is a provision because it is created from profit and loss account. 7. Capital or Debenture redemption fund: Both are reserved because they are created from the profit and loss appropriation account.

State with reasons whether the following are reserves or provisions:1. Provision for taxation2. Sinking fund3. Investment fluctuation fund4. Dividend equilization fund5. Employees’ Bonus fund6. Reserve for repairs and renovation7. Capital or Debenture redemption fund

Answer»

1. Provision for taxation: It is a provision because it is created from the profit and loss account.

2. Sinking fund: It is a provision because it is created from the profit and loss account.

3. Investment fluctuation fund: It is a provision because it is created from the profit and loss account.

4. Dividend equalization fund: It is a reserve because it is created from the profit and loss appropriation account.

5. Employees’ Bonus fund: It is a provision because it is created from the profit and loss account.

6. Reserve for repairs and renovation: It is a provision because it is created from profit and loss account.

7. Capital or Debenture redemption fund: Both are reserved because they are created from the profit and loss appropriation account.