Double entry

Joined
Feb 20, 2014
Messages
10
Reaction score
0
Could you please explain me the double entry bookkeeping of the provisions. What should be credited and debited if provision for decommisioning were made and is shown in the statement of the financial possition.
Thank you !
 

kirby

VIP Member
Joined
May 12, 2011
Messages
2,445
Reaction score
332
Country
United States
If you paid cash for an expense your entry is
DR Expense
CR Cash
In the case of a provision you are accruing an expense that you estimate will be paid
So entry is
DR Provision for Decommission Expense (shown as an Expense in Income Statement)
CR Accrued Expense Liability (shown in Liability section of balance sheet)
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Top