Query on basic accounting

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pavankumar (Querist)
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19 June 2013 "Provision is an charge against profit"
Q1)From above statement Can we say that Provision for Dividend a/c is also charge against profit.
Please guide me

Ganeshbabu K

Ganeshbabu K (Expert)
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19 June 2013 No, dividend is appropriation of profits..

"Dividend is a distribution to shareholders out of profits or reserves available for this purpose."

if it is provision for expenses.. it is charge against profits..
.
.
because here even though you have profit or not we need to charge to statement of profit and loss

Thanks & regards
Ganesh babu k

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