What will be DBK Provision entry? And bank collection entry of DBK income.

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Accepted Answer

DBK Provision entry is made to account for potential duty drawbacks, while bank collection entry of DBK income records the actual receipt of duty drawback income.

DBK Provision entry is a provision made in the accounts to account for potential duty drawbacks that may be claimed in the future.
This entry is made to ensure that the financial statements reflect the potential liability of duty drawbacks accurately.
Example: Dr. Duty Drawback Provision Account, Cr. Provision for Duty Drawback
Bank collection entry of DBK income is made when the actual duty drawback income is received in the bank account.
This entry records the actual receipt of duty drawback income and reflects the cash inflow in the bank account.
Example: Dr. Bank Account, Cr. Duty Drawback Income

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What will be DBK Provision entry? And bank collection entry of DBK income.

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