Provision for bad debts is made due to the principle of conservatism and revenue matching. Let's understand both these principles in detail.

Conservatism Principle
The conservatism principle is a principle of accounting that requires a company to recognize expenses and liabilities as soon as possible, but to delay the recognition of revenue and assets until they are assured or realized. This principle is used to ensure that financial statements are not overstated, and that losses are recognized as soon as possible.

Provision for bad debts is an example of conservatism principle as it is a way to recognize potential losses from customers who may not pay their debts in the future. This provision is made by estimating the amount of potential bad debts and setting aside a portion of revenue to cover those losses. This ensures that the financial statements do not overstate the company's assets and income.

Revenue Matching Principle
The revenue matching principle is a principle of accounting that requires a company to match its revenue with the expenses incurred to generate that revenue. This principle ensures that the company's financial statements accurately reflect the company's profitability.

Provision for bad debts is also an example of revenue matching principle as it is an expense that is matched with the revenue generated from the sale. When a company sells a product or service, it generates revenue, and at the same time, it incurs expenses like the cost of goods sold, marketing expenses, and bad debt expenses. By making a provision for bad debts, the company recognizes that it may not receive the full amount of revenue it generated from the sale.

Conclusion
In conclusion, provision for bad debts is made due to the principles of conservatism and revenue matching. By making this provision, the company ensures that its financial statements accurately reflect its profitability and do not overstate its assets and income.