Question

'Proposed dividends' is shown in the balance sheet of a company under the head of _________.

• A. Provisions
• B. Reserves and Surplus
• C. Current liabilities
• D. Other liabilities

Answer 1

Answer: (A)

Provision is defined as the amount set aside to meet the future liability. provisions may be made for short term and long term liability. Short term provisions are those against which the liability is going to arise in next 12 months or so.

Proposed dividend is shown under the heading of provisions in the balance sheet in liability side. Other provisions may be, employee benefits, taxation etc.