PROVISION : Provision is a charge to P&L a/c.

RESERVE : Reserve is an appropriation of profit.

provision : it is because of legal necessity.

reserve : it is a matter of finavial prudence.

provision : creation of provision decreases the funds of

the business.

reserve : creation of reserve increases the working capital

of the business.

provision : can be made irrespective of profit / loss

reserve : cannot be made when there is loss.

provision : are made against expected losses.

reserve :safe guard against unexpected losses and there by

to strengthen the financial position of the company