what is difrence between provision and reserves?
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Reserve is created against the charge of the profit and loss appropriation account. & Provision is created against the charge of the profit and loss account.
Reserve is created against the charge of the profit and loss appropriation account. & Provision is created against the charge of the profit and loss account.
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reserve :it is an appropriation of profit... created to meet unknown liability.. it increases amount of working capital.. it is shown on liability side of balance sheet.....
provision :it is a charge on profit.... created to meet known liability... it is for meeting an anticipated loss or liability.... it is not available for distribution of divident....
provision :it is a charge on profit.... created to meet known liability... it is for meeting an anticipated loss or liability.... it is not available for distribution of divident....
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