CBSE BoardEnglish MediumSTD 11 CommerceAccountDepreciation, Provisions and Reserves1 Mark
Question
Why 'Dividend Equalisation Reserve' is termed as Reserve and not a provision?
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Answer
Dividend Equalisation Reserve is not debited to Profit and Loss Account. Its creation does not reduce the net profits. It is appropriation of profit and is debited to Profit and Loss Appropriation Account.
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