Provision for expenses

Provision means a liability arising from past activity. For example if you are paying salary by the 10 th of next month, in order to close the entries of the current month you are required to create a provisional entry as Salary account Dr To salary payable And once the actual payment is made the accounting entry should be Salary payable account Dr To bank .

Hie Srini, - Provision means liabilities It means payable account it's a very useful for controlling payable accounts like telephone charges, ESIC accounts, EPF accounts. Example- - We have not got the expense bill so, at the time of accounting Provision Expense a/c dr s.creditor a/c cr

In financial accounting, a provision is an account which records a present liability of an entity. The recording of the liability in the entity's balance sheet is matched to an appropriate expense account in the entity's income statement. Eg: Provision for Bad and doubtful debts.

hi Srini In financial accounting, a provision is an account which records a present liability of an entity. The recording of the liability in the entity's balance sheet is matched to an appropriate expense account in the entity's income statement. While to non-professionals it has the connotation of a pool of cash set aside to meet a future liability. A provision can be a liability of uncertain timing or amount. A liability, in turn, is a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits. A provision shall be recognized if the following criteria are fulfilled: 1. An entity has a present obligation as a result of a past event; 2. It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation;

In financial accounting, a provision is an account which records a present liability of an entity. The recording of the liability in the entity's balance sheet is matched to an appropriate expense account in the entity's income statement. While to non-professionals it has the connotation of a pool of cash set aside to meet a future liability. A provision can be a liability of uncertain timing or amount. A liability, in turn, is a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits. A provision shall be recognized if the following criteria are fulfilled: 1. An entity has a present obligation as a result of a past event; 2. It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation;

In financial accounting, a provision is an account which records a present liability of an entity. The recording of the liability in the entity's balance sheet is matched to an appropriate expense account in the entity's income statement. While to non-professionals it has the connotation of a pool of cash set aside to meet a future liability. A provision can be a liability of uncertain timing or amount. A liability, in turn, is a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits. A provision shall be recognized if the following criteria are fulfilled: 1. An entity has a present obligation as a result of a past event; 2. It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; 3. A reliable estimate can be made of the amount of the obligation.

Hi Srini In financial accounting, a provision is an account which records a present liability of an entity. The recording of the liability in the entity's balance sheet is matched to an appropriate expense account in the entity's income statement. While to non-professionals it has the connotation of a pool of cash set aside to meet a future liability. A provision can be a liability of uncertain timing or amount. A liability, in turn, is a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits. A provision shall be recognized if the following criteria are fulfilled: 1. An entity has a present obligation as a result of a past event; 2. It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; 3. A reliable estimate can be made of the amount of the obligation. 4. A specific current statement, the entity will accept certain responsibilities and other parties have valid expectations that the entity will discharge its responsibilities. No provision, however, is recognized for costs that need to be incurred to operate in the future. Also, an obligation always involves another party to whom the obligation is owed (even if this party is unknown). Eg:- Provision for Doubtful Debts, Provision for Gratuity, Provision for Loss of Subsidiary.