The major differences between accrual and provision are as follows −
Records expenses incurred but payment yet to made.
Existence of liability is certain.
Works on matching concept.
Each revenue reporting should match equal expense in a period.
Made on basis of actual documentary evidence.
Accrual amount is realized and certain.
Amount of accrual is a specific amount.
Quantified with accuracy.
May or may not increase income all time.
Prepaid expenses, insurance premium etc.
Records expense that have not yet been incurred.
Existence of a liability is not entirely certain.
Works on prudence concept.
Business should never anticipate profit, but should make all provision for any future loss that going to occur.
Made on basis of estimation/information from credible source/less substantial documentary on probably occurrence of loss.
Provision amount is not certain.
Anticipated amount is an estimation one.
Not necessarily be accurately quantified.
Results in decline profits.
Depreciation provision, provision for bad debt etc.