what do u mean by provision in accounts.?

7 Answers

Relevance
  • 1 decade ago
    Favourite answer

    Provision in accounts is referred to as a process by which a certain amount is set aside from the current year's profits to meet future uncertain liabilities or losses.

    For instance, provision for doubtful debts is an estimate based on the judgment of the management that a certain percentage of the receivables will be delinquent and thereby cause a loss to the business.

    • Commenter avatarLog in to reply to the answers
  • stock
    Lv 4
    4 years ago

    Define Provision

    • Commenter avatarLog in to reply to the answers
  • altom
    Lv 4
    3 years ago

    What Is Provision

    • Commenter avatarLog in to reply to the answers
  • At the time of finalisation of accounts for a particular year needs o understand as to which expenses for this year likely to affect the cash flow in a next year is provided before working out profit and loss. The said expenses list will be provided and after passing a journal entry it will be considered as expenses duly verified and audited. In the opening next year books such expenses will be reversed and actual expenses if falls will be accounted on cash basis.The principle is to having taken care off those expenses in the same year for which P&L is getting finalised.This way such liabilities will be provided known as provision for expenses.e.g. Encahments of leave.

    • Commenter avatarLog in to reply to the answers
  • What do you think of the answers? You can sign in to give your opinion on the answer.
  • 4 years ago

    For the best answers, search on this site https://shorturl.im/axgLT

    every years companies have to pay tax. Out of profits, some amount is earmarked towards provision for taxation which wil be paid to Income Tax Department, say by advance tax, and then final tax.

    • Commenter avatarLog in to reply to the answers
  • 5 years ago

    can we allocate the provision for other debtors?

    • Commenter avatarLog in to reply to the answers
  • Kokita
    Lv 4
    4 years ago

    most probably (in for profit business), this would be "sale of goods or services"

    • Commenter avatarLog in to reply to the answers
Still have questions? Get answers by asking now.