Difference between the provision and Reserve
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7
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For such expenses/losses provision is created, as a charge against profit. ...Reserves are the only appropriation ofprofit. So, the basic difference between provision and reserve is that net profit is calculated only after giving effect to all provisions, whereasreserves are created only after reckoning profit
For such expenses/losses provision is created, as a charge against profit. ...Reserves are the only appropriation ofprofit. So, the basic difference between provision and reserve is that net profit is calculated only after giving effect to all provisions, whereasreserves are created only after reckoning profit
Answered by
33
HLWWW DEAR..............
HERE IS UR ANSWER............
#PROVISION:-
1) PROVISION IS A CHARGE AGAINST THE PROFITS.
2) IS MADE FOR KNOWN LIABILITY OR EXPENDITURE.
3) IT IS USED FOR THAT PURPOSE ONLY.
4) ABOVE THE LINE MEANS P&L a/c.
#RESERVE:-
1) RESERVE IS AN APPROPRIATION ON PROFITS.
2) IT IS MADE FOR FUTURE LIABILITY.
3) IT CAN BE UTILISED FOR FUTURE PURPOSE.
4) BELOW THE LINES MEANS P&L appropriation a/c.
HERE IS UR ANSWER............
#PROVISION:-
1) PROVISION IS A CHARGE AGAINST THE PROFITS.
2) IS MADE FOR KNOWN LIABILITY OR EXPENDITURE.
3) IT IS USED FOR THAT PURPOSE ONLY.
4) ABOVE THE LINE MEANS P&L a/c.
#RESERVE:-
1) RESERVE IS AN APPROPRIATION ON PROFITS.
2) IT IS MADE FOR FUTURE LIABILITY.
3) IT CAN BE UTILISED FOR FUTURE PURPOSE.
4) BELOW THE LINES MEANS P&L appropriation a/c.
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