what is the differace between depreciation and provision
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Answer Posted / parvinder singh
If the actual decrease in the value of an assets happen,
then it is known as depreciation but if we analyse with the
books of accounts that the value of an assets decrease in
the future, it is known as provision of depreciation. For
eg if the value of an assets in 10000 INR and we had
already made some provision for futre to decrease by 5%
then in next financial year it shows only 9500 as value in
the books of accounts but if the actual decrease in the
value of an assets in 7% then actual depreciation is Rs 700
but provision made of only 500.
| Is This Answer Correct ? | 47 Yes | 6 No |
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