Provision

A liability of uncertain amount is called provision.

In financial accounting, a provision is an account that records a present liability of an entity to another entity. The recording of the liability affects each the current liability side of an entity's balance sheet as well as an appropriate expense account in the entity's income statement.

Debt

An amount of money borrowed by one party from another is called debt.

An amount of money borrowed by one party from another. several corporations/individuals use debt as a way for making giant purchases that they might not afford under traditional circumstances. A debt arrangement gives the borrowing party permission to borrow money under the condition that it's to be paid back at a later date, usually with interest.

Doubtful Debt Reserve

Also called a bad debt reserve, this is often a contra account listed inside the current asset section of the record. The doubtful debt reserve holds a add of money to permit the current within the accounts receivable ledger because of non-collection of debts. this could even be remarked as associate degree allowance for bad debts. Once a uncertain debt becomes uncollectable, the amount the amount written off.

Doubtful Debts

Doubtful debts are those debts which a business or individual is unlikely to be ready to collect. the reasons for potential non-payment will include disputes over offer, delivery, the condition of item or the appearance of economic stress within a customer's operations. when such a dispute occurs it's prudent occurs this debt or portion therefrom to the uncertain debt reserve. this can be done to avoid over-stating the assets of the business as trade debtors are bad net of uncertain debt. when there is no longer any doubt that a debt is uncollectible, the debt becomes bad. associate degree example of a debt becoming uncollectible would be:- once final payments have been made of the liquidation of a customer's limited liability company, no any action can be taken.

Bad Debt

The amount which cannot be recovered from debtors is called bad debt.

An entry found on a business's statement that represents the amount of noncollectable assets that happens in a very given amount. In terms of accounting entries, whenever an quantity will increase debt expense, an equivalent amount is attributable to the business's allowance for unhealthy debts.

A bad debt is an amount owed to a business or individual that is written off by the soul as a loss because the debt can't be collected and every one cheap efforts to collect it are exhausted. This sometimes happens once the someone has declared bankruptcy or the cost of following further action in a trial to collect the debt exceeds the debt itself.

Doubtful Debt

Doubtful Debt Reserve

 

Unearned Income

Income which is received in advance but not yet earned is called unearned income. For example: Unearned Fee,

Unearned financial gain is all income that's not earned  from your job or from your business.  Some common varieties of unearned income are:

Prepaid Expense

An expense which is paid before its due date is called prepaid expense. For example: Prepaid Insurance, Prepaid rent, 

 A type of plus that arises on a balance sheet as a results of business making payments for goods and services to be received in the close to future. whereas postpaid expenses ar at the start recorded as assets, their worth is expensed over time because the profit is received onto the profit-and-loss statement, as a result of unlike conventional expenses, the business can receive something of import within the close to future.