Business Management Question: Download Business Management PDF

What is the difference between PROVISION & RESERVE?

Tweet Share WhatsApp

Answer:

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

Download Business Management PDF Read All 36 Business Management Questions
Previous QuestionNext Question
What is the differentiate between tailormade homemade and readymade?Why did you chose this specialization(finance,HR)?