Question

provision for making payments in future​

Answer 1

Explanation:

A provision is an amount that you put in aside in your accounts to cover a future liability. The purpose of a provision is to make a current year's balance more accurate, as there may be costs which could, to some extent, be accounted for in either the current or previous financial year.

Answer 2

Provision for making payments in the future refers to an amount set aside by a company or individual to ensure that future payments for expected liabilities or obligations can be made when due.

• This is a form of financial planning and risk management. For example, a company may make a provision for paying employee bonuses, settling legal claims, or repairing equipment.
• By making a provision, the company can ensure that it has the resources available to meet these obligations and maintain its financial stability.
• Provisions can be made in the form of cash reserves, investments, or the other financial instruments.

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