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DK Goel Class 11 Accountancy Solutions: Chapter 17 Overview

DK Goel Class 11 Accountancy Solutions: Chapter 17 Overview

Class 11 DK Goel Solutions Chapter 17 - Provisions and Reserves

Provisions and Reserves by DK Goel

To properly understand Class 11 accountancy Chapter 17 DK Goel solutions, we need to know what Provisions and Reserves are. Provision is “The amount retained or written off via providing depreciation, renewal and diminution in the value of assets” or simply, it is the cash amount set aside to cover the expected liability or depreciation in the value of an asset.

DK Goel Solutions Class 11 Accountancy Chapter 17 - Free PDF Download

Accountancy is a brand-new topic for the incoming Commerce students. This is a very practical and intriguing subject with a wide range of employment possibilities. This subject allows students to explore their interests in accounting and possibly choose it as a career option.

It's a subject that's all about keeping track of financial information. All transactions, including analyses, reports, and summaries, are recorded in chronological order. This is critical information that serves as both feedback to management and a record for agencies and tax collection.

There are four different types of accounting:

Accounting for Corporations
Accounting in the Public Interest
Government
Forensic accounting.

DK Goel Accountancy Class 11 Solutions Chapter 17 Provisions and Reserves is a chapter from the current version of DK Goel Class 11 Accountancy books that are detailed by qualified Accountancy teachers. DK Goel Solutions are provided by Vedantu to help students understand all of the theories in specific. Although there are many concepts in accounting, the concepts of trial balance, depreciation, and bank reconciliation statement (BRS) are essential.

Students must understand how to construct provisions and reserves since they are very necessary during the complete accounting process to represent the accurate financial condition of a firm. This chapter provides in-depth information about provision, reserves, their types, and distinctions.

The chapter also includes several questions that will be beneficial to Accountancy students in Class 11 and will aid in the development of strong concepts that will be beneficial in your career.

All About the Chapter

What is a Reserve?

Reserves are the cash that is kept aside from the profit for unexpected losses or liabilities and any kind of future uncertainties. From the definition we understand that Reserve is a part of profit whereas, Provisions is taken against profit. So Reserve can not be used to pay for liabilities. It is used to make the company or business financially strong. In this article, we will learn about the important topics of the chapter.

The Differences Between Provisions and Reserves are:

The provisions are cash kept aside for known or expected liabilities, whereas the reserves are part of profit kept aside for unexpected future liabilities.
Reserves are to be debited from the profit/loss in time of unexpected need of a company or asset. The provisions are to be credited in the beginning in the profit and loss account for future use.
Reserves can be distributed as dividends among the shareholders, which is not true for provisions. They are good for showing the strength of the company.
Provisions are mandatory according to GAAP and reserves are not. Though there can be few exceptions. One good example of mandatory reserves is the reserve requirement in a bank.
In DK Goel Accountancy Class 11 solutions Chapter 17 PDF we learn the effect of Provisions and reserves on the taxable profits. provisions do not have any effect. Reserves are part of the profit only, so the taxable profit plays a key role in creating a reserve.

The similarity between Provisions and Reserves, according to Accountancy Class 11 Chapter 17 DK Goel Solutions, is that both are counted as liabilities in the balance sheet though one is charged against profit(Provisions) and another one is appropriated for profit (Reserves) From dk goel solutions Class 11 accountancy solutions chapter 17 we can surmise that there are mainly two types of Reserves- 1. Capital Reserve and 2. Revenue reserve.

What is the Capital Reserve?

The reserve created from the capital profit of the company is called Capital Reserve. One example of Capital Reserve is the share issue premium.

What is the Revenue Reserve?

The reserve which is created from the net profit or the revenue is called Revenue Reserve. The examples will be welfare funds for employees and dividend equalization reserve etc.

The Difference Between Revenue Reserves and Capital Reserves is as Follows:

Basis	Revenue Reserve	Capital Reserve
Creation source	Reserves created out of profit generated from normal conduct of business activities or operations or in other words, day to day business.	Reserves created out of profit generated from nonoperational activity. Non operational activities are depicted as the selling of fixed assets or selling of shares etc.
Utilization	It can be utilized for payment of dividend though the main purpose is to keep the reserve ready to use for future operations requirements of the company.	It cannot be utilized for payment of dividend.
Purpose	1. Increases the financial position of the company. 2. Can be used as reinvestment for the company	1. Counters the capital losses of the company. 2. This kind of reserve is created to fix sudden changes like inflation or to enable business expansion etc.
Time frame	Mostly used for short time projects	Used for long term projects

Some Types of Provisions:

For taxation
For bad debts
For discount on debtors

Some Types of Reserves:

Contingency Reserve
Capital Redemption Reserve
Dividend equalization Reserve
Workmen compensation Reserve
Debenture Redemption Reserve
General Reserves

Download DK Goel accountancy Class 11 solutions chapter 17 pdf to get the definitions and short question answers.

Preparation Tips

If you want to score high marks, please go through Class 11 dk goel solutions provisions and reserves.
Must go through Learning the definitions along with real-life examples will make it easy to remember the concept.
Download a free copy of Vedantu’s dk goel solutions Class 11 accountancy solutions chapter 17 and learn all the types of provisions and reserves along with their similarities and differences will help you score good marks.

FAQs on DK Goel Class 11 Accountancy Solutions: Chapter 17 Overview

1. How can I find the correct step-by-step solution for a specific question in DK Goel's Chapter 17 on Provisions and Reserves?

On this page, you can find detailed, step-by-step solutions for all the exercise questions from Chapter 17, 'Provisions and Reserves'. Each solution is presented clearly, following the method prescribed in the latest CBSE guidelines for the 2025-26 session, making it easy to understand how to arrive at the correct answer.

2. Do these solutions cover all the types of problems on Provisions and Reserves from the DK Goel textbook?

Yes, our subject experts have solved every question from DK Goel Class 11 Accountancy, Chapter 17. This includes problems related to:

Creating various types of provisions, like Provision for Doubtful Debts and Provision for Discount on Debtors.
Understanding and creating different reserves, such as General Reserve and Specific Reserve.
The correct accounting treatment and presentation of these items in financial statements.

3. How do the solved problems for Chapter 17 help in understanding the practical difference between a Provision and a Reserve?

The solutions demonstrate the difference through practical application. You will see that a Provision is a charge against profit created for a known liability (e.g., bad debts), and its calculation is shown in the Profit & Loss Account. In contrast, a Reserve is an appropriation of profit for future contingencies and is shown in the Profit & Loss Appropriation Account. Seeing them solved side-by-side clarifies their distinct accounting treatments.

4. What is the correct format for showing calculations for Provisions and Reserves in an exam?

The solutions provided here follow the standard format accepted by CBSE. They emphasise showing clear working notes for all important calculations, such as calculating the amount for Provision for Doubtful Debts. Following this format helps in scoring full marks as it shows the examiner your clear understanding of the concepts.

5. Beyond just finding the right answer, what else should I learn from these DK Goel solutions for Chapter 17?

Beyond just checking your final answers, you should use these solutions to understand the 'why' behind each step. Focus on the accounting principles being applied, like the Principle of Prudence (Conservatism) for creating provisions. This approach will help you tackle even unfamiliar questions in your exams with confidence.

6. What common mistakes in accounting for Provisions and Reserves do these step-by-step solutions help prevent?

By following these step-by-step solutions, you can avoid common errors such as:

Calculating provision for discount on debtors before deducting the new provision for doubtful debts.
Incorrectly treating a provision as an appropriation of profit.
Forgetting to show the final effect of provisions and reserves in the Balance Sheet.

The correct method for each of these is clearly illustrated in the solved problems.

7. Are these solutions for DK Goel's Chapter 17 helpful for final exam revision?

Absolutely. These solutions are an excellent revision tool. By practising the questions and referring to our step-by-step methods, you can strengthen your understanding of Provisions and Reserves, improve your problem-solving speed, and learn the correct presentation of answers as expected in the Class 11 Accountancy exam.