Question

Provision of taxation is made by debiting which account?

Options

• Profit and loss account

• Provision for taxation account

• Both of these

• None of these

Answer 1

Profit and loss account

Explanation:

The provision for income tax (corporation tax) is made by debiting the profit and loss account and crediting the provision for taxation account, which is presented on the liabilities side of the balance sheet under the heading 'Current liabilities and Provisions.'