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Term: Accounting -> Provision
Term:

Provision

Definition:

Provision, generally, is to prepare in advance for an event that is projected to place in the future. In accounting, it is an amount charged against profits for a specific liability (for example: bad debts, depreciation or taxes). A liability may be known, but the amount is often uncertain. This uncertainty may lead to an adjustment in a later income statement once the final amount of the liability is ascertained.

Related terms:

Financial Institution

Multiple-step income statement

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