State one reason underlying the provision for doubtful debts in financial statement?

One reason underlying the provision for doubtful debts in financial statements is to ensure that the company's financial statements reflect a more accurate representation of the company's financial position by accounting for potential losses from customers who may not be able to pay their debts. This helps to provide a more realistic picture of the company's financial health and performance.

To ensure fair presentation of financial statements by matching expenses with revenues in the period in which they are incurred or earned, regardless of the timing of cash flows.