04 September 2011
Provision:It may be income or expense but can not be determined accurately in many circumstances, normally we encounter this at the time of finalization of accounts for a particular period for example provision for income tax, provision for telephone expenses, provision for auditors remuneration, provision for bad and doubtful debts etc usually it is estimated meticulously. Normally provision for income will not be provided because based on conservative convention means estimate expenses or losses not profits or gains.
Outstanding: It may be income or expenditure which is earned/incurred but not received/paid during the accounting period, both are to be taken into account at the end of accounting period.
Provisions/outstanding expenses will appear under current liability in Balance Sheet, whereas outstanding income will appear under current assets in Balance Sheet.
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