Interested to Buy Any Domain ? << Click Here >> for more details...
what is the difference between provision for bad debts and
reserve for bad debts?
- 9 Answers
- 38255 Views
- Genpact, I also Faced
- E-Mail Answers
Answer Posted / amit kapoor
Reserves
1. It is created by debiting the profit and loss
appropriation account.
2. It is created to meet an unknown liability, or to
strengthen the financial position of the company or for
equalization of dividends etc.
3. A reserve is created only when there is profit in the
business.
4. It can be distributed among shareholders as dividend.
5. The reserve is created without taking into consideration
the actual amount required except in the case of redemption
of debentures when a definite sum is set aside.
6. Creation of reserve depends upon the financial policy of
the business and discretion of its management.
7. It is usually shown on the liability side of the balance
sheet as it is not a specific reserve.
Provisions
1. It is created by debiting the profit and loss account.
2. It is created to meet a known liability or a specific
contingency, e.g.. provision for bad and doubtful debts, or
provision for depreciation etc.
3. A provision is created irrespective of whether there is
profit or loss in the business.
4. It is not available for distribution as dividend among
shareholders.
5. A provision is made for a definite amount and,
therefore, a definite sum is set aside every year to meet
the known contingency.
6. Making of a provision is a must to meet known liability
or contingency.
7. The provision is generally shown on the assets side of
the balance sheet.
| Is This Answer Correct ? | 31 Yes | 7 No |
Post New Answer View All Answers
Hello Frd's This is Mohd NaseerUddin. Is Anyone can help me out to findout a Accounting Peachtree 7.2 note's aswel as Focus notes also Plsssssss helpme out to find it. My E-mail id is mohd_naseeruddin43@yahoo.com
Short Answer on ______Amortization
when calculating for np% do i include interest or do i take it off
What is the rate of basic excise duty and specific duty And I want to know that how can I see that vat rate in up ,excise duty and tds details Please tell me site plese
am attend to bank exam(iob)pls send model questions
what is new updates in account
What does stand for EPD,MIS? Can anyone tell me briefly n clearly about this?
What is the procedure to take loan
can you define exogenity endogenity both terms are from economics both are different from exogenous & endogenous variables. I can not find the answers. please help if you can....
which are the basic princeples of accountancy... with examples
For what purpose ERS is used for?
What is the use of final account?
i am called for interview but im getting confused wt sort of questions i wd have to face,its a bank job and post is cash ofiicer please help me.
Expand RMP
what is the main link between the income statement and the balance sheet?
