What is provision and reserve and how u treat in account
- 13 Answers
- 54379 Views
- Accenture, ASD Lab, Capital IQ, Ramky, I also Faced
- E-Mail Answers
Answer Posted / vinod k balasubramaniam
(1) Provision is made to meet known liability the
amount of which cannot be ascertained with substantial
accuracy.
Reserve is created to meet unexpected losses and
contingencies likely to arise in future.
(2) Provision can be used only for meeting the specific
purpose for which it has been made.
Reserve can be used for any purpose unless it is
created for a specific purpose.
(3) Provision is a charge on profits and reduces the
amount of net profits.
Reserves is an appropriation of profits and
reflects undistributed profits.
(4) Provision is to be made even if there are no
profits.
Reserve is created only when there are profits.
(5) Provision creation is compulsory.
Reserves creation is at the discretion of
management with the exception of debenture redemption
reserve for which the Companies Act has made a provison in
certain cases.
(6) Provision is meant for meeting expected losses and
cannot be used for dividend distribution.
Reserves is a part of owner’s funds and can be used
for distribution of dividends.
| Is This Answer Correct ? | 66 Yes | 4 No |
Post New Answer View All Answers
A specially designed interview book on interviews for accounting Jobs . Pl send your mail addresses for despatch
difference between vat 47 & vat 49
why specifically inited states ?
what is the difference between cash flow and funds flow
can any one send me payables real time scenarious or any projects
In Pricing the gallons of petrol sold,service station 'A' follows the first-in-first-out method,while service station'B'follows last-in-first-out method.On 1st January both has the same quantity in stock viz.6,000 gallons at Rs.26 per gallon.During the month,each station recieved additional supplies of 6,000 gallons at Rs.27.50 per gallon.Sales for each of these two stations,during the month,were 8,800 gallons at Rs.29 per gallon. Determine for each service station,profit earned during the month and value of the petrol in stock at close of the month.
How to raise my credit score if I have 500 credit score?
sir i am working consruction company.we have 4 projects in varrious places.i enter attendance in payroll by project wise.if enter autofill salaries combained all projects.i want individual salaries base on attendance feeding method.because staff are changing in one project to another project offenly.please explain method
is there any chance for confilcts between an accountant and a sales executive ? If yes how do you resolve the same as an accountant ?
what is mixed invoice, prepaid invoice,quick invoice,podefault invoice,withholding tax invoice,please explain me in detail?
When is the profession tax applicable? Is there a liability on the employer to pay PT? What is the amt of PT in case salary exceed Rs. 10,000/- pm
Expand---------MDOT
Short Answer on ___________fluctuating capital
can i have practical examples of AS-30
what is absorbtion coasting?
