Reserves, Provisions and CL

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Q. What is reserves?

A. The portion of profit kept aside for unforeseen obligations of a business.

Q. What is Provision?

A. A portion of money from the business set aside for meeting known liabilities or expenses.

Q. What is CL in finance/accounting?

A. Current liabilities are the obligations of the company which are expected to get paid within one year and include liabilities such as accounts payable, short term loans, Interest payable, Bank overdraft and the other such short term liabilities of the company.



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