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WAEC Financial Accounting 2006 Question 8

Question 8

Company Accounts

The amount set aside out of profits earned by a company which are not meant for liability or contingency are

  1. A.dividends
  2. B.provisions
  3. C.retained profits
  4. D.reserves
Show the answer and explanation

Answer: D (reserves)

Explanation

Profits set aside not for a known liability are reserves.