Question

Give the word / term or phrase which can substitute each of the following statement.

A provision which is created on sundry debtors.

Answer 1

Provision for Doubtful Debts

Explanation: A provision which is created on sundry debtors is called provision for doubtful debts. Even after deducting the amount of bad debts, debtors still include some debts which remain doubtful. But the amount of actual loss would be known only in the subsequent year. So, a provision is created to cover the possible losses which are likely to occur in future.