Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 26 - No. 16)
Which of the following describes the purpose of 'provision' in accounting?
To record the initial investment made by partners.
To allocate profits among partners.
To estimate a future expense or liability.
To prepare financial statements at the end of the year.
Explanation
Provisions are established to account for future expenses or liabilities.
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