Question

Which of the following is not a provision?

• A. Provision for Depreciation
• B. Provision for Discount on debtors
• C. Provision for Tax
• D. Provision for out standing income

Answer 1

The correct option is D Provision for out standing income

Provision is a charge against profit, all future expenses and losses which are more probable are provided. As per accrual concept we can make provisions for expenses likely to be incurred but can only record income only after its earned.