WHAT ARE THE DIFFERENCE BETWEEN RESERVES AND PROVISIONS?
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Answer / guest
Reserves is something that the company has with
itself....whereas provisions are expenses tat company
expects and provides for the future....
Is This Answer Correct ? | 14 Yes | 3 No |
Answer / praveen kumar
Reserves are those amount which is reserved by the company
for future unexpected losses.Where as the provision are
those amount which is reserved by the company for a
specific expenses in future.
Is This Answer Correct ? | 4 Yes | 0 No |
Answer / k. phalguna rao
Reserves: every year transfer some amount from net profits
of the company for future needs to purchase plan &
machinary
for Ex: Machine value 10 lacs and it's working capacity 10
years it means every year it's working capacity will be
reduced after 10 years this machine value become 0 so we
have to purchase new machine for purchase the machine we
have to spend huge money so we cannot effort from working
capital
New machinary will be purchased with the funds of Reserves
and surplus
Provisions: Generally provisions are made for two things
first one is for Bad debts and second one is for year end
adjustments
Is This Answer Correct ? | 4 Yes | 0 No |
Reserves are the balance which is reserved by the co for the
further planning of the business and surplus profit is taken
under Reserve and surplus account.
But Provisions are thos balances which are prepared for
unexpected losses in future like Bad debts, bad debts
written off...
Is This Answer Correct ? | 0 Yes | 0 No |
Answer / manjari
Reserve means some amount allovated from profit for an unexpected expenses. Like compensation to employee.
Provisions means out standing expenses payable by company. Ex rent payable.
Is This Answer Correct ? | 0 Yes | 0 No |
Answer / rajesh
reserves are created from surpluss profits to showinng
financial position of the company,purchase of assets and
redemption of share capital etc
provisions are created for meet the expindutre which will
incured in futere
Is This Answer Correct ? | 1 Yes | 2 No |
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