Loss Contingency

[kamranACA]

Dear,

One needs to understand the basics of accounting if he is looking for some explanation.

You can pass following entry

......... Expense (Debit) Rs. 5

..........Provision already made (Debit) Rs. 10

.........................Bank account (Credit) Rs. 15


You can also pass following entries which will give same results

First entry

..............Expense (Debit) Rs. 5
...................Provision (liability) (credit) Rs. 5

Second entry

.............Provision-liability (Debit) Rs. 15
...................Bank (Credit) Rs. 15

So buddy if you will make out the T accounts, you will get same results.

I passed two entries for the sake of clarity.

I don't know why you failed to understand.


Regards,


KAMRAN.