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Categories >> Accounting >> Accounting General
 
 


 

 
 Audit interview questions  Audit Interview Questions (428)
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 Accounting General interview questions  Accounting General Interview Questions (2833)
 Accounting AllOther interview questions  Accounting AllOther Interview Questions (4369)
Question
Difference between reserves for bad debts & provision for
bad debts.
 Question Submitted By :: Accounting-General
I also faced this Question!!     Answer Posted By  
 
Answer
# 1
company will kept some amount as reserve for bad debts in advance.if any debt becomes bad then it will realise from reserve..that is known as reserves for bad debts.

Any debit is in a position of becoming insolvent or unpaid,those debt is called provision for bad debts
 
Is This Answer Correct ?    16 Yes 1 No
Pramod
 
Answer
# 2
PROVISION IS KEPT WITH THE NAME OF A PARTICULAR LIABILITY
AND IT IS CHARGET TO PROFIT AND LOSS ACCOUNT WHERE AS
RESERVE IS KEPT FROM PROFIT AND LOSS APPROPRATION ACCOUNT
FOR GENERAL PURPOSE TO UTILIZE OR ORGANIZATION EXPANSION
 
Is This Answer Correct ?    6 Yes 3 No
Irfan Khan
 
 
 
Answer
# 3
Reserve is an appropriation on profit and created only if
company earns profit and shown in profit and loss
appropriation account.

Provision charged against profit and created either earn
profit or incur loss and shown in profit and loss account.
 
Is This Answer Correct ?    4 Yes 1 No
Navaneeth
 
Answer
# 4
PROVISION IS KEPT TO MEET THE ASSUMED LIABILITY IN FUTURE
IN ALL COMPANY.
RESERVE FOR BAD DEBT. WE KEPT THIS RESERVE TO OVERCOME FROM
THE LOSS WHICH WILL OCCUR DUE TO BAD DEBT...
 
Is This Answer Correct ?    0 Yes 3 No
Raju Gupta
 

 
 
 
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