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nature of account

26 May 2010

What is the nature of provision for debtors, provision for depreciation and other provision accounts. is it personal or real and why?????????

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2 Replies

JITENDRA KUMAR DHINGRA (Executive) (93 Points)
Replied 02 June 2010

Nature of Provision of Depreciation/Debtors....... is Nominal Account

Rule :-

Dr All expenses and losses
Cr all income and profits

Explanation

When we made the provision we Debit the provision against the respective asset and credit such respective asset and at the time of closing of the books we set off it through Profit and loss account

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vikas ghuwalewala (owner) (86 Points)
Replied 02 June 2010

I know that account of provision for any purpose is in the nature of nominal. I think this is bcoz the origin of that accounts is profit and loss a/c and p&l is nominal account. But I am confused for my logic is it true of false.