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WAEC Financial Accounting 2017 Question 50

Question 50

Bad Debts and Provisions

An amount set aside to meet expenses whose value is not certain is a

  1. A.reserve.
  2. B.liability.
  3. C.provision.
  4. D.prepayment.
Show the answer and explanation

Answer: C (provision.)

Explanation

A provision is charged against profit for a known expense or loss whose amount cannot be fixed exactly.