Question

Provision for tax appears in a company’s balance sheet under the sub-head ______.

Options

• Short-term Provisions

• Reserves and Surplus

• Long-term Provisions

• Other Current Liabilities

Answer 1

Provision for tax appears in a company’s balance sheet under the sub-head short-term provisions.

Explanation:

Provision for Tax is the amount set aside to pay income tax for the current financial year, which is generally payable within the next 12 months. Since it is expected to be settled in the short term, it is classified in the Balance Sheet under:

Current liabilities → short-term provisions