Provision for Contingency: Recognized as Ascertained Liability in Mercantile Accounting System for Accurate Financial Statements.

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....Deduction of Provision for contingency - Ascertained liability - the system of accounting, followed by the assessee, is mercantile and any expenditure, not paid by the close of the year, is as it is allowable and in-fact, even in a mercantile system of accounting, while income is also to be included, which has accrued to the assessee, so also the expenditure is to be allowed in similar fashion. - HC....