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DK Goel Solutions Class 11 Accountancy Chapter 17

Commerce

DK Goel Solutions Class 11 Accountancy Chapter 17

Class 11 DK Goel Solutions Chapter 17 - Provisions and Reserves

Provisions and Reserves by DK Goel

To properly understand Class 11 accountancy Chapter 17 DK Goel solutions, we need to know what Provisions and Reserves are. Provision is “The amount retained or written off via providing depreciation, renewal and diminution in the value of assets” or simply, it is the cash amount set aside to cover the expected liability or depreciation in the value of an asset.

DK Goel Solutions Class 11 Accountancy Chapter 17 - Free PDF Download

Accountancy is a brand-new topic for the incoming Commerce students. This is a very practical and intriguing subject with a wide range of employment possibilities. This subject allows students to explore their interests in accounting and possibly choose it as a career option.

It's a subject that's all about keeping track of financial information. All transactions, including analyses, reports, and summaries, are recorded in chronological order. This is critical information that serves as both feedback to management and a record for agencies and tax collection.

There are four different types of accounting:

Accounting for Corporations
Accounting in the Public Interest
Government
Forensic accounting.

DK Goel Accountancy Class 11 Solutions Chapter 17 Provisions and Reserves is a chapter from the current version of DK Goel Class 11 Accountancy books that are detailed by qualified Accountancy teachers. DK Goel Solutions are provided by Vedantu to help students understand all of the theories in specific. Although there are many concepts in accounting, the concepts of trial balance, depreciation, and bank reconciliation statement (BRS) are essential.

Students must understand how to construct provisions and reserves since they are very necessary during the complete accounting process to represent the accurate financial condition of a firm. This chapter provides in-depth information about provision, reserves, their types, and distinctions.

The chapter also includes several questions that will be beneficial to Accountancy students in Class 11 and will aid in the development of strong concepts that will be beneficial in your career.

All About the Chapter

What is a Reserve?

Reserves are the cash that is kept aside from the profit for unexpected losses or liabilities and any kind of future uncertainties. From the definition we understand that Reserve is a part of profit whereas, Provisions is taken against profit. So Reserve can not be used to pay for liabilities. It is used to make the company or business financially strong. In this article, we will learn about the important topics of the chapter.

The Differences Between Provisions and Reserves are:

The provisions are cash kept aside for known or expected liabilities, whereas the reserves are part of profit kept aside for unexpected future liabilities.
Reserves are to be debited from the profit/loss in time of unexpected need of a company or asset. The provisions are to be credited in the beginning in the profit and loss account for future use.
Reserves can be distributed as dividends among the shareholders, which is not true for provisions. They are good for showing the strength of the company.
Provisions are mandatory according to GAAP and reserves are not. Though there can be few exceptions. One good example of mandatory reserves is the reserve requirement in a bank.
In DK Goel Accountancy Class 11 solutions Chapter 17 PDF we learn the effect of Provisions and reserves on the taxable profits. provisions do not have any effect. Reserves are part of the profit only, so the taxable profit plays a key role in creating a reserve.

The similarity between Provisions and Reserves, according to Accountancy Class 11 Chapter 17 DK Goel Solutions, is that both are counted as liabilities in the balance sheet though one is charged against profit(Provisions) and another one is appropriated for profit (Reserves) From dk goel solutions Class 11 accountancy solutions chapter 17 we can surmise that there are mainly two types of Reserves- 1. Capital Reserve and 2. Revenue reserve.

What is the Capital Reserve?

The reserve created from the capital profit of the company is called Capital Reserve. One example of Capital Reserve is the share issue premium.

What is the Revenue Reserve?

The reserve which is created from the net profit or the revenue is called Revenue Reserve. The examples will be welfare funds for employees and dividend equalization reserve etc.

The Difference Between Revenue Reserves and Capital Reserves is as Follows:

Basis	Revenue Reserve	Capital Reserve
Creation source	Reserves created out of profit generated from normal conduct of business activities or operations or in other words, day to day business.	Reserves created out of profit generated from nonoperational activity. Non operational activities are depicted as the selling of fixed assets or selling of shares etc.
Utilization	It can be utilized for payment of dividend though the main purpose is to keep the reserve ready to use for future operations requirements of the company.	It cannot be utilized for payment of dividend.
Purpose	1. Increases the financial position of the company. 2. Can be used as reinvestment for the company	1. Counters the capital losses of the company. 2. This kind of reserve is created to fix sudden changes like inflation or to enable business expansion etc.
Time frame	Mostly used for short time projects	Used for long term projects

Some Types of Provisions:

For taxation
For bad debts
For discount on debtors

Some Types of Reserves:

Contingency Reserve
Capital Redemption Reserve
Dividend equalization Reserve
Workmen compensation Reserve
Debenture Redemption Reserve
General Reserves

Download DK Goel accountancy Class 11 solutions chapter 17 pdf to get the definitions and short question answers.

Preparation Tips

If you want to score high marks, please go through Class 11 dk goel solutions provisions and reserves.
Must go through Learning the definitions along with real-life examples will make it easy to remember the concept.
Download a free copy of Vedantu’s dk goel solutions Class 11 accountancy solutions chapter 17 and learn all the types of provisions and reserves along with their similarities and differences will help you score good marks.

FAQs on DK Goel Solutions Class 11 Accountancy Chapter 17

1. Are Accounts Class 11 easy to score marks?

The accounting curriculum for Class 11 is extremely extensive. The curriculum's chapters are both conceptually rich and high-scoring. To do well in this topic, all a student needs to do is practice regularly. They can use dependable solutions to try to tackle exercise issues. This would improve their efficiency and precision.

Accountancy DK Goel: Problems and Solutions the Goel Class 11 PDF has been written methodically on the Vedantu platform. This will ensure that students do not become confused when doing the calculations.

2. Why should one choose Vedantu PDF solution?

At Vedantu, we make every effort to give students the finest possible learning environment. Experts from all over the country deliver live lectures. Experts trust us, therefore Vedantu is a trustworthy platform since we ensure that the best is offered to students by the best faculty. We provide notes with the utmost care, ensuring that every aspect of the notes and solutions assists students in learning more effectively. Class 11 students can benefit from the notes and solutions by learning effective problem-solving approaches and improving their time management skills. In the time provided, students can look up the questions and answer them. With some practice, they can enhance their problem-solving speed.

For commerce students, DK Goel Accountancy Class 11 solutions are available in PDF format. All of the solutions, as well as the study materials, are available for free. It will be much easier to refer to this study material if you have access to a soft copy. Students come first at Vedantu, and that is the motto: to make learning easier for students.

3. What is the accounting treatment for provisions and reserves?

A reserve is a part of profit set aside for a company's unforeseeable commitments.

The Profit and Loss Appropriation Account is debited to produce it.
It offers funds for the operation of the firm as well as protection against unexpected costs.
The presence of profit is necessary for reserve allocation.
Reserves are used to pay dividends.
Reserves lower the organization's net profit.
It is always displayed on the liability side and can be applied to any situation.

A provision is a sum of money set aside by a company to cover known liabilities or expenses. The Profit and Loss Account is debited to produce it.

The provision protects a company from costs associated with known liabilities.
The presence of profit is not required for provision allocation.
Provisions cannot be used to pay dividends.
Provision for dividend distribution diminishes profitability.
In the event of an asset, the provision appears as a deduction from the relevant asset; in the case of liabilities, the provision appears on the liabilities side.
Provision must be used for the exact purpose for which it was set aside.

4. Why should students consider the DK Goel Accountancy Class 11 solution?

Students can benefit from studying DK Goel solutions Class 11 accountancy PDF chapter-wise solutions on the Vedantu platform because:

It has the most dedicated solutions.
The solutions are simple to understand.
It is offered for free on the Vedantu platform.
Solutions are available on mobile as well as a website too.
For complex questions, there are clear answers.
It serves as a thorough tool for planning and revising.
The answers are based on the most recent CBSE syllabus.
The solutions are presented in a chapter-by-chapter order.

5. What would you recommend to help me prepare better for the test?

The following are some recommendations to help you better prepare for the test:

First and foremost, study the entire chapter and comprehend the topics.
Concentrate on examples, and don't forget to go over them.
Solve all of the examples and see if your answers are correct.
For a better comprehension of the chapter, visit the Vedantu website for more notes and study materials.
You can download PDF too for free.
Clear your doubts in a live session on the Vedantu platform.
After you've grasped the fundamentals, practice every day.