generally we create reserves and provisions to provide us funds for future expenses and contingencies.
then why do we prepare a "PROVISION FOR DISCOUNT ON CREDITORS" which is a gain to us.
saketh vaddadi (Student CA Articles) (49 Points)
13 July 2014generally we create reserves and provisions to provide us funds for future expenses and contingencies.
then why do we prepare a "PROVISION FOR DISCOUNT ON CREDITORS" which is a gain to us.
Anantha Subramanian
(Student CA IPC / IPCC)
(131 Points)
Replied 13 July 2014
we show them just because for clarity in books of accounts.. and the provision for discount of creditors will reduce the value of creditors shown in the balance sheet. if we dont record provision for discount of creditors then there will be no justification in books of accounts to show the value of creditors @ lesser value.... if we dont show that and creditors value is low then it might be understand that the portion has been paid by us.. to avoid this mis interpretation it is recorded :)
CA and CMA Ravinder Singh
(CA and CMA)
(853 Points)
Replied 13 July 2014
Tribhuvan Aditya Singh
(Student as well as Self-employed)
(3710 Points)
Replied 13 July 2014
koundinya
(stundent)
(56 Points)
Replied 13 July 2014
CharanKanwal
(Article)
(22 Points)
Replied 13 July 2014
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