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Nature of account

Abheer (student) (217 Points)

26 June 2012

what is the nature of accounts for provision for depreciation and provision for doubtful debts??

are they credited or debited? explain....

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17 Replies

pankaj kumar (studying ) (186 Points)
Replied 27 June 2012

provision for Depreciation is a nominal a/c.........while provision for doubtful debts is a personal a/c

........... these accounts are credited ven opened..

Premkumar VRR (articled assistant) (114 Points)
Replied 27 June 2012

Dear pankaj, only depreciation is nominal account and provision for depreciation is real account ,, because it will reduce from assets ,,

Abheer (student) (217 Points)
Replied 27 June 2012

I m relly confused....tell me which one is right please???

CA Vivek Kumar (Practicing CA And GST Content writer for legalfilings.in) (660 Points)
Replied 27 June 2012

provision for depreciation is real a/c

sangeeta (student) (69 Points)
Replied 27 June 2012

provision for depreciation & prov. for doubtful debts are real a/cs. they reduce the assets.

depreciation a/c is a nominal a/c. its closed at the end of year by transferrin to P & L a/c.

1 Like

Ramanuj (Accountant.) (834 Points)
Replied 27 June 2012

Depreciation is nominal a/c & provision Depreciation & doubtful debts are real a/cs.

1 Like

Vadivel (Senior Executive - Finance) (23 Points)
Replied 27 June 2012

Both these are for reduction of asset value and both are provisions for expense. Both should be in the same nature of accounts. It is nominal a/c.

Premkumar VRR (articled assistant) (114 Points)
Replied 28 June 2012

Hi friends , remember one thing , provision for depreciation reduces from fixed asset so it is real account and provision for doubtful account reduces from sundry debtors so it is personal account ... Fixed asset is real and debtors is personal , provision created for what purpose will determine its nature also ...

Premkumar VRR (articled assistant) (114 Points)
Replied 28 June 2012

Sanat Kumar Dutta (2 Points)
Replied 14 February 2018

Please tell the correct answer.

ABHISHEKH (Accounts Professor) (22 Points)
Replied 05 March 2019

Provision for Depreciation Account is a real account as it is maintained against the fall in the value of a fixed asset which is in itself is a real account and it is treated as a liability for the business.