Chapter 13 of 17
Revision Notes
Provisions and Reserves — Revision Notes
NIOS · Class 10 · Accountancy
Provisions and Reserves revision notes for NIOS Class 10 Accountancy: 4 topics in quick points. Part of the NIOS Class 10 Accountancy syllabus.
50 questions32 flashcards5 concepts
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Key Topics to Revise
1
Meaning and Need
- A provision is an amount set aside out of profits to meet a specific known liability or loss, the exact amount of which cannot be determined with accuracy.
- A provision is also defined legally as any amount written off or retained for depreciation, renewals, diminution in the value of assets, or for a known liability of uncertain amount.
- A provision is a charge against profits and is debited to the Profit and Loss Account.
2
Types of Reserves
- General Reserve is created without any specific purpose.
- General Reserve is also called Free Reserve.
- General Reserve can be used for any future purpose.
3
Reserve Fund and Sinking Fund
- A Reserve Fund is a reserve whose amount is actually invested outside the business in securities or other assets.
- In a General Reserve, the amount stays within the business.
- In a Reserve Fund, the amount is separately invested outside the business.
4
Accounting Treatment and Differences
- Provision is debited to the Profit and Loss Account.
- Reserve is debited to the Profit and Loss Appropriation Account.
- Provision reduces net profit.
Get complete notes with diagrams and examples
Full NotesKey Concepts
A provision is an amount setA reserve is the amount setGeneral Reserve is a reserve createdCapital Reserve is created outSecret Reserve is a reserve
Frequently Asked Questions
What are the important topics in Provisions and Reserves for NIOS Class 10 Accountancy?
Key topics in Provisions and Reserves include Meaning and Need, Types of Reserves, Reserve Fund and Sinking Fund, Accounting Treatment and Differences. Study these first, then practise questions on each for the NIOS Class 10 board exam.
How should I revise Provisions and Reserves for the NIOS Class 10 board exam?
Learn the core ideas first, then work through the 50 practice questions on Provisions and Reserves. Revise definitions regularly and use flashcards for quick recall before the exam.
Sources & Official References
Content is aligned to the official syllabus. Refer to the board website for the latest curriculum.
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