Asked by: Hiedra Dikovbusiness and finance debt factoring and invoice discounting
What is provision in accounting entry?
Last Updated: 25th May, 2020
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In this regard, what is provision and its entry?
jagadish. Answered On : Oct 13th, 2007.Provisionmeans liabilities It means payable account?it's an veryusefull for controlling payable accounts liketelephone charges,ESIC accounts, EPF accounts,?EPF payable accountsDr to EPFaccountsESIC payable accounts Drto ESICaccount.
Similarly, is provision a debit or credit? The provision for doubtful debts is anaccountsreceivable contra account, so it should always have acreditbalance, and is listed in the balance sheet directlybelow theaccounts receivable line item.
Similarly one may ask, what is provision in accounting with example?
A provision is the amount of an expense thatanentity elects to recognize now, before it has preciseinformationabout the exact amount of the expense. Forexample, anentity routinely records provisions forbad debts, salesallowances, and inventoryobsolescence.
What is a loan provision?
A loan loss provision is an expensesetaside as an allowance for uncollected loans andloanpayments. This provision is used to cover anumber offactors associated with potential loan losses,including badloans, customer defaults, and renegotiatedterms of aloan that incur lower than previouslyestimatedpayments.