Accountantjee

  ✅ Introduction: Why This Topic Matters Understanding the difference between accruals and provisions is essential for anyone learning accounting or managing business finances. These two concepts play a major role in accurate financial reporting — and are often misunderstood. In this blog, we’ll break them down in simple, beginner-friendly language , with: 1. Real world examples 2. Journal entries 3. Table for comparison 4. Practical tips 🔹 What Is an Accrual in Accounting? Accruals are revenues or expenses that have been earned or incurred but not yet received or paid . It means something has already happened — the service is received, or the product is sold — but the cash hasn’t been exchanged yet. This is part of the accrual basis of accounting , which focuses on matching income and expenses to the time they occur , not when money changes hands. 🧠 Easy Example: Accrued Salary Let’s say your employees worked in March, but salaries are paid on the 5th of April. Even thoug...