Amount set aside to meet losses due to bad debts is a

The correct answer is: B. Provision

A provision is an amount set aside to meet a liability that is not certain to occur or the amount of which cannot be precisely determined. In the case of bad debts, a provision is set aside to cover the possibility that some of the company’s accounts receivable will not be collected.

A reserve is a fund that is set aside for a specific purpose, such as to

meet future expenses or to provide for contingencies. Reserves are not liabilities, as they are not obligations to pay out money.

A liability is an obligation to pay

out money in the future. Liabilities can arise from contracts, from the purchase of goods or services, or from the operation of a business.

Therefore, the correct answer is B. Provision.