Question

13. When demand for additional tax raised by the income-tax department is accepted by the company
(a) the amount is shown as a contingent liability in the notes to accounts
(b) no entry is passed
fc) the amount is debited to Profit & Loss Account and credited to Provision for Tax Alc
(d) the amount is debited to Tax Paid Account and credited to Provision for Tax Alc​

Answer 1

Explanation:

A) the amount is shown as a contingent liability in the notes to accounts