1)Difference between provision and accrual

Question

Accepted Answer

Provision is an estimated liability, while accrual is a recognized expense.

Provision is an estimated liability that is recognized when there is a probable obligation and the amount can be reasonably estimated.
Accrual is a recognized expense that is recorded when it is incurred, regardless of when the payment is made.
Provision is typically used for uncertain or contingent liabilities, such as legal claims or warranties.
Accrual is used for regular expenses, such as salaries, rent, or utilities.
Example of provision: A company sets aside a provision for potential warranty claims on its products.
Example of accrual: A company records an accrual for employee salaries earned but not yet paid at the end of the accounting period.

Accepted Answer

Provision is only made for future expenses whereas accrual is for both cost and revenue. The provision are expected and uncertain, whereas accrual is certain and easily forseen.

Accepted Answer

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1)Difference between provision and accrual

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