Provision for doubtful debts is made in conformity with
Question 1 Report
Provision for doubtful debts is made in conformity with
Answer Details
The provision for doubtful debts is made in conformity with the prudence concept in accounting. The prudence concept requires that a provision should be made for any possible losses or expenses that may occur in the future, even if they are uncertain. In the case of provision for doubtful debts, it means that a provision is made for debts that may not be recovered in the future due to the uncertainty of their recovery. This provision is made to ensure that the financial statements present a true and fair view of the company's financial position, and that any possible losses are accounted for in a timely manner.
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