Check sibling questions



Provision for Expense

Expense Entry is passed if Bill or Invoice has been received from party


It is a routine Entry

Expense Dr

            To Party



Provision for expense is made at month end for those parties/vendors who do not submit their bills

It is a book closure entry like

Expense Dr

      To Provision for Expense


(Provision for expense is also called

Expense Payable)


Telephone Bill from Airtel

Received of Rs 2500.Amount paid

by cheque



When Bill Received

Telephone Exp Dr 2500

        To Airtel              2500


When Payment Made

Airtel                        2500

           To Bank                           2500








At the month end, The Company estimated that telephone expense for the month is Rs2500,bill not yet received from Airtel



When Provision Made  

Telephone Exp 2500

                To Provision for Expense 2500


When Bill Received next month of Airtel of 2500

Provision for Exp       2500

            To Airtel              2500


When Payment Made of 2500

Airtel                        2500

           To Bank                        2500



Instead of Provision for expense, some company’s use Ledger Telephone Expense Payable


Suppose Bill Received next month of Airtel of 2700


Provision for Exp    2500

Telephone Exp       200

        To Airtel                2700


When Payment Made

Airtel                        2700

      To Bank                           2700


Suppose Bill Received next month of Airtel of 2100  

Provision for Exp       2500

To Airtel                              2100

To Excess Provision Written off 400              


When Payment Made

Airtel                        2100

      To Bank                2100




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CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 13 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.