Accrual is income earned but not received or expenses incurred but not spent. Provision is making provision from the profit for a specified or known expense which is to be met in unknown future.
What is the difference between Modified accrual and Full accrual method?"
I the old days a provision for expenses was an expense accrual that was not posted to creditors but to a liablity provision line. This is a reminiscence of tax accounting. I the old days a provision for expenses was an expense accrual that was not posted tno creditors but to a liablity provision line. This is a reminiscence of tax accounting.
My understanding is Accrual = (VOWD - Actual expenditure)
i must say accrued and provision is two different things,accrued is something paid to you but you can spend it,concerning provision is not the same.
Accrual is income earned but not received or expenses incurred but not spent. Provision is making provision from the profit for a specified or known expense which is to be met in unknown future.
What is the difference between Modified accrual and Full accrual method?"
I the old days a provision for expenses was an expense accrual that was not posted to creditors but to a liablity provision line. This is a reminiscence of tax accounting. I the old days a provision for expenses was an expense accrual that was not posted tno creditors but to a liablity provision line. This is a reminiscence of tax accounting.
My understanding is Accrual = (VOWD - Actual expenditure)
i must say accrued and provision is two different things,accrued is something paid to you but you can spend it,concerning provision is not the same.
Matching principle is the base of accrual accounting system which tells that each revenue earned should be matched with cost spent to earn that revenue so accrual account and matching principle is not different but same thing.
In prepaid accounts cash is paid before and benefits are taken later while in accrual accounts benefits are taken before but cash is paid later.
A provision is when it's grater than 50% chance of happening where as a contingent is less than that. You show a provision on the accounts but not the contingent.
Accrual concepts use the matching of expenses to get an overall picture of a person's account. A realization concept is based on the results of the accrual process.
Provisions are charge against profit and Reserves are appropriation of profit.
line orgnization has no provision of syaffs ,whereas line and staff org- has provision of staffs
Provision means the expenditure known but not exact amount to be spent that is unknown but payable means the exact amount of expenses knows that is to be paid.