Question

write 3 features of charge against profit​

Answer 1

Explanation:

Profits are an important part of a business so as its allocation. That is why the Profit and Loss Appropriation Account is an important part of an organization. Profit and Loss Appropriation Account is necessary for businesses, especially partnerships because they help to allocate the net of expenditures and incomes among the various partners.

Answer 2

Answer :

Charge Against Profit is Provisions.

Provisions -

Provisions are the amount set aside out of Profit to provide for :

i ) Depreciation or renewals

ii ) Any known liabilitiy of which the amount cannot be determined with substantial accuracy.

Features of Provision :

• It is created for meeting a known liabilitiy

• The purpose is to meet a specific future loss

• It is a charge against Profit

• It is compulsory

• It cannot be used for dividend distribution

Reserves -

Reserves is that part of profit of the business which is set aside or retained in the business future use.

Features Of Reserves :

• It is created for meeting an unknown liabilitiy

• To strengthen the financial purpose of business

• It is an appropriation of Profit

• It is not compulsory

• It can be used for dividend distribution