Question

Examples of short-term provisions and long-term provisions?

Answer 1

The examples of Short-term Provisions are Provision for discount on debtors, Provision for tax, doubtful debts etc. The examples of Long-term Provisions are Provision for renewals and repairs, Provision for depreciation. A provision is termed as the cash amount, which is set aside from the business profits and the specific amount is used to cover the known liability of the businesses.