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DP
Question Practice

Why might a business prefer to create provisions rather than reserves?

Attempt the question, check the explanation, and continue with similar questions to build confidence before exams.

MCQ_SA
CBSE
Class 11
Accountancy
Financial Accounting - I
Depreciation, Provisions and Reserves
Question Bank

Why might a business prefer to...

Single Answer MCQ
Q-00054350

Why might a business prefer to create provisions rather than reserves?

1

Provisions are more flexible

2

Provisions are based on future uncertainty

3

Reserves affect cash flow more

4

Provisions cannot be reversed

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