While preparing a Funds Flow Statement, if there is no explicit additional adjustment given for 'Provision for Taxation' and 'Proposed Dividend', what is the standard accounting treatment?

Question

Accounting · Funds Flow Statement

Verified Solution4 OptionsUpdated: October 2026👁️1 View

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Correct answer

The opening balance is treated as the amount paid during the year, and the closing balance is treated as a current year provision.

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Answer 1

The difference between opening and closing balance is transferred to the P&L Adjustment Account.

Answer 2

The difference between opening and closing balance is considered as the net amount paid.

Answer 3

The opening balance is treated as the amount paid during the year, and the closing balance is treated as a current year provision.

Answer 4

Both provisions are completely ignored and excluded from the statement.

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