Accounting Questions and Answers

What is the Provision? What is the Entry for Provision?

Provision means liabilities it means payable account A it?s an very useful for controlling payable accounts like telephone charges, ESIC accounts, EPF accounts, A EPF payable accounts Dr to EPF accounts ESIC payable accounts Dr to ESIC account.

Provision Account is Prepared for fixed future liabilities. In every organisation there is limited source of capital and can not able to pay hues certain. so every organisation transfer some amount to provision account. which any business concern use any time when they relies. exp. depreciation Account, Reserve & surplus Account