Answer / guest

PROVISION : Provision is a charge to P&L a/c.
RESERVE : Reserve is an appropriation of profit.
provision : it is because of legal necessity.
reserve : it is a matter of finavial prudence.
provision : creation of provision decreases the funds of
the business.
reserve : creation of reserve increases the working capital
of the business.
provision : can be made irrespective of profit / loss
reserve : cannot be made when there is loss.
provision : are made against expected losses.
reserve :safe guard against unexpected losses and there by
to strengthen the financial position of the company

Answer / ankit

provision is generally concerned about future contingency
while reserve is about to save some money from profits......

Answer / sri

Provision is for a known future contingency

Reserve is for an unknown future contingency

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