what are the similarities between provision and reserve?

Answers were Sorted based on User's Feedback



what are the similarities between provision and reserve?..

Answer / bhagya

Provision
we are creating provision for expenses which are going to
occur in future we do not konw the exact future expenses

Reserve
out of profit some protion of allotted as a reserve balance
are distribute as a dividend to shareholders
this reserve use for future business investment

Similarities between provision & reserve we are allocating
some amount ie., unknown amount (Unknown exp., or unknown
purpose of reserve creating (fe.,)we do not know the
investment amount

Is This Answer Correct ?    5 Yes 3 No

what are the similarities between provision and reserve?..

Answer / arun kumar

provision is the amount kept a side for future known
liabilities
reserve is an amount kept a side to face future risk occur
in the business

Is This Answer Correct ?    4 Yes 3 No

what are the similarities between provision and reserve?..

Answer / h.r. sreepada bhagi

As mentioned by Bhagya, accounting for expenses for a
period, the amount is not known exactly but is reasonable
estimated based on the past & showing would be liabilities
in the Balance Sheet. These provisions need to be reversed
in the subsequent accounting period and the expense shall be
accounted for exact amount, when the supporting bill is
received or the expense is ascertained with proper back-up
documents. provisioning is necessary in 'Accrual Concept' of
Accounting to match expenses with revenues in any accounting
period.
Reserve - As mentioned above is profit set aside for
specific or general Purpose. Besides this there can be
Depreciation Reserve, which represents accumulated
depreciation on Fixed Assets (This's an exception).
Provisions are part of liabilities & Reserves form part of
'Net Worth'
Provisions are shown as Provisions for Expenses under
'Current Liabilities & Provisions' & Reserves can be shown
as 'General Reserve', Dividend Equalisation Reserve',
Investment Allowance Reserve', 'Depreciation Reserve', etc,
in the 'Balance Sheet'.

Is This Answer Correct ?    2 Yes 2 No

what are the similarities between provision and reserve?..

Answer / k.thirumamagal

as devi said provision is charge against profit and reserves
are appropriation of profit. provision is minimum amount
which is set aside by the company to meet the known
liabilities and reserve is set aside to meet the unknown
liabilities.

Is This Answer Correct ?    0 Yes 0 No

what are the similarities between provision and reserve?..

Answer / devi

simply provision means which will create against the profit
and reserve means appripriation of profit

Is This Answer Correct ?    2 Yes 3 No

what are the similarities between provision and reserve?..

Answer / mohammed rizwan

provision means the debts which are not covered during the
accounting period.
reserve means the profit which are kept aside for future
purpose is known as reserve.

Is This Answer Correct ?    2 Yes 4 No

Post New Answer

More Accounting General Interview Questions

What are the minimum and maximum members allowed in partnership firm

3 Answers  


I am kind of confused between VAT and income tax! and am i supposed to use them both in the income statement?

1 Answers  


what is the definition of derivative, what is a security?

2 Answers  


What do you mean by Rollforward and open item in Accounts Reconciliation?

1 Answers  


what is reserve capital

8 Answers   Capital IQ,






If A car in Name of company got damaged. and total amount of its repairing is 15,000/- and insurance company give me 10,000/- of it. Balance amount we paid through bank or cash .Then What is the entry for this in books.Kindly mention Ledgers with their respective Group Head.

2 Answers  


I have passed in SBI clerical exam 2009 , pls tell me what question will be asked for interview .pls mail it on my email id sawant.supriya51@gmail.com

0 Answers  


if we have taken Mobile phone for employees use ,can we taken as assests for the company ? then what is the deprecation rate ?

6 Answers  


Under which head the cleaning expenses will come in accounts

4 Answers  


Tell me what is public accounting?

0 Answers  


BRS

2 Answers   Akzonobel, BEL, Chartered Accountant,


Revenue Expenditure

0 Answers   Chartered Accountant,


Categories