Question

Give any two differences between Reserve and Provision.

Answer 1

Differences between Reserve and Provision:

$\begin{array}{cc}\text{Reserve}& \text{Provision}\\ \text{1. Reserve is an appropriation of profit.}& \text{1. A provision is a charge on profit.}\\ \text{2. Main purpose of creating a reserve is to}& \text{2. Main purpose of provision is to meet the}\\ \text{strengthem the financial position and to meet the}& \text{known liability.}\\ \text{unforeseen losses or liabilities.}& \end{array}$