Salary Provision

Why do we record salary provision, although we know the exact amount of salary payable?

Showing Answers 1 - 2 of 2 Answers


  • Aug 30th, 2016

If the salary incurred and settled for current month, than there is no need of providing the provision, we have to pass provision in case if salary incurred in current month and settled in next or subsequent period. But some companies follow the system of Salary payable as provision upon the computation of Salary during the month it incurred and adjust the provision with the payment during the time of settlement even though if it is in the same month which is very much valid posting and it will not make any difference instead the unsettled amount will remain in the Salary payable account.

Dr. Salary
Cr. Salary payable (provision) (upon the computation or EOM)

  Was this answer useful?  Yes

Shubhi tiwari

  • May 21st, 2017

For preparing salaries and wage bills

  Was this answer useful?  Yes

Give your answer:

If you think the above answer is not correct, Please select a reason and add your answer below.


Related Answered Questions


Related Open Questions