Difference between Provisions and reserves
Answers were Sorted based on User's Feedback
Answer / vsharma
Provisions generally done against the expenses whereas
reserve is related to surplus of funds with in organisation.
Is This Answer Correct ? | 20 Yes | 2 No |
Answer / vivek
Provision is a charge against incomes whereas reserves is an appropriation of profits.
provision is to be created even when there is no profit whereas reserves can be created only out of profits.
Is This Answer Correct ? | 18 Yes | 0 No |
Absolutely right my dear friend,
We need to explain the situation to the readers clearly that
when these both are created.
A provision is created when there is an approximately known
reduction (or loss) in value of assets, so that we can
report our assets in balance sheet truly.
(e.g. for reduction in value of assets - prov for
depreciation; the rates are specified in comapanies' act &
it act;
for loss in value of assets - prov for bad debts; management
will decide over the matter)
A reserve is created when we decided to appropriate our
earned profits for some specific purpose. Otherwise they
will remain in general reserve a/c.
Good luck friends.
Is This Answer Correct ? | 5 Yes | 1 No |
Answer / loknath behera
Provisions :-
1.Created by debiting P/L account .
2.Created to meet the known liability or a specific contingency
3.Not available for dividends .
4.It is shown in the asset side of balance sheet .
Reserves :-
1. It is created by debiting P/L Appropriation account .
2. Created to meet unknown liabilities .
3. Created when there is profit in business .
4.It can be distributed among shareholders and dividend .
5.Liability side of balance sheet .
Is This Answer Correct ? | 1 Yes | 0 No |
Dear sir we are running a export enterprises and we are marchent and exporter we purchaige the goods from mahahrashtra /gujrat and many indian stats our iec cod is issue from varanasi and our firam is registerd from azamgarh utter pardesh kindly advise me can i purchige the goods from gujrat and send direct to port or shude we inter the goods in utter pardesh then we sent to port i m asking this question because our salse department is not issue form H kindly give me advise i m waiting for your for reply thanks and regards e mail id: burque786azm@yahoo.com javed
Is it legal for an organization to keep two sets of accounting records; one for tax and one for book? Why or why not?
Tell us do you have any professional experience of this field?
deduct deperection from land true or false
dear sir,how to maintain petty cash book. its voucher and posting on cash book and ledger A/c?
what is a corporate chart of accounts and its purpose?
what is retention? how caculate on asset
i am indrani,iam siting for a/c assistance post of muthoot finance..so my question is what kind of question they may ask related to a/c or finance?or other than subject what question can be asked like why do u want to join this co etc.. ?
What are control ledgers?
Hi everybody, can anybody tell me what will be the journal entry for ( 1). Withdraw from SBH Rs.10,000 for office use. 2). Withdraw from SBH Rs.5,000 for private use. Thanks,
what is the amount withdrawlfrom other cbs branch by multicity chequ book.
What is partnership accounting?