01 July 2016
it is very typical of Commerce people.......just add prefix (Adjective) "provision" to what i said in my answer and I hope you will notice the difference by yourself. For any further difficulty, do right back....
07 July 2016
There is nothing DEEP in this. Making PROVISION for 'future uncertainty' is a very common practice of human being. Since future is uncertain (and NOT dark, please note), it is prudent for a businessman as well to make provision for future, in books of accounts. Uncertainty can be on many aspects.....out of that two aspects are provided for/covered viz. 01. Provision of BAD debt and 02 Provision for DOUBTFUL debt
08 July 2016
If there is uncertanity in future about payments by debtor , then obviously we will create prov. for doubtful debt (because at this point of time debt are doubtful ,not has become bad). THEN WHY WE CREATE provision for bad debt(AT THIS POINT OF TIME)
11 July 2016
see, there are two types of RISK.......let me try to put it in case of life of human being so that the point may be well APPEALED to you...... in the case of human life of human being, apart from many other RISKs, two major risks are 01. risk of accident and 02, risk of life... Your query is some what similar in asking......if accident insurance is covered, then why life insurance is availed? On similar lines, provisions is required to be made for accidents ( doubtful debt ) as well as death ( bad debt)
CAclubindia
