Provisions and reserves
This query is : Open
Nishant Kumar
(Querist)
17 October 2017
According to a book, one of the reasons for which a provision is created is to meet a liability which has been known to have arisen. Could you please explain me this with an example? Thank you!
20 October 2017
"Definition: A provision is an amount set aside for the probable, but uncertain, economic obligations of an enterprise. A provision is an amount that you put in aside in your accounts to cover a future liability. ... When accounting, provisions are recognized on the balance sheet and then expensed on the income statement."
Simply Said.,
Which expenditure is given monthly basis (1st 30th/31st) or Year ended these are create as provisions...
Ex: Salary & Wages, Tds, Income Tax liability, Rental, Interest and etc.,
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