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What is the key purpose of creating provisions?
  • a)
    To strengthen the financial position
  • b)
    To distribute dividends among shareholders
  • c)
    To increase the working capital
  • d)
    To fund expansion projects
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
What is the key purpose of creating provisions?a)To strengthen the fin...
The main purpose of creating provisions is to strengthen the financial position of a company by setting aside funds for known liabilities or potential losses. This helps the company manage its financial stability and meet its obligations.
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What is the key purpose of creating provisions?a)To strengthen the financial positionb)To distribute dividends among shareholdersc)To increase the working capitald)To fund expansion projectsCorrect answer is option 'A'. Can you explain this answer?
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