Dr P&L - Bad debts xxxxx
Cr - Provision for Bad debts (BS) xxxxx
When the debt actually gets bad, what they do is
Dr - Provision for Bad debts (BS) xxx
Cr - Debtors/receivable a/c xxx
Note - There are 2 types of provisions.
1. General - where individual attention is not given to debtors. (ex 10% of debtor balance)
2. Specific - Individually identify who are bad (Debtor A, B & C)
If you have a general provision you can set-off the bad debt against that account.
If you have a specific provision, you have to see whether he has been provided for. If that's the case you just debit that a/c. If that debtor is not individually provided for, you have to write it off against the P&L account.
Again, normally companies have to give the breakup of the provisions accounts in their financials. They have to show,
1. What is the actual bad debt
2. What are the general or specific provisions made during the year.
Because these two can come in one line.
before you do the double entry for the bad debts recovered, you have to reinstate the debt by making the following entries:- Dr. debtors account Cr. bad debts recovered account after this, you will have to do the double entry for this:- Dr.cash or bank Cr. debtors account that's all u have to do!!
The double entry for recording provision for doubtful debt is: Dr. Doubtful Debts (P&L expense a/c) xxx Cr. Provision for Doubtful debt xxx Once it is certain that the debt has gone bad debt; following entry is made: Dr. Provision for Doubtful debt xxx Cr. Loan / Portfolio xxx
before you do the double entry for the bad debts recovered, you have reinstate the debt by making the following entries:- Dr. debtors account Cr. bad debts recovered account after this you will have to the double entry for this:- Dr.cash or bank Cr. debtors account that's all u have to do!!
Debit bad debtsCredit accounts receivable
Debit bad debtsCredit accounts receivable
before you do the double entry for the bad debts recovered, you have to reinstate the debt by making the following entries:- Dr. debtors account Cr. bad debts recovered account after this, you will have to do the double entry for this:- Dr.cash or bank Cr. debtors account that's all u have to do!!
Debit Bad Debt Expense. Credit Allowance For Doubtful Accounts (a contra-asset account on the Balance Sheet). Before you do the double entry for the bad debts recovered, you have to reinstate the debt by making the following entries:- Dr. debtors account Cr. bad debts recovered account after this, you will...
The double entry for recording provision for doubtful debt is: Dr. Doubtful Debts (P&L expense a/c) xxx Cr. Provision for Doubtful debt xxx Once it is certain that the debt has gone bad debt; following entry is made: Dr. Provision for Doubtful debt xxx Cr. Loan / Portfolio xxx
before you do the double entry for the bad debts recovered, you have reinstate the debt by making the following entries:- Dr. debtors account Cr. bad debts recovered account after this you will have to the double entry for this:- Dr.cash or bank Cr. debtors account that's all u have to do!!
Debit bad debtsCredit accounts receivable
In the Journal Proper
Bad debt reserve is an amount set aside by companies in the event that some creditors would not be able to pay their debt. A double entry is to write off the bad debt from the accounting books. For example, company A sold goods to company B for $100 on credit. This is entered as $100 debit in company A's ledger. Later on, company B is unable to fulfill payment on the goods. Company A therefore must write this off in their ledger to keep their assets in check. This will now be entered as $100 credit in the ledger.
Debit bad debtsCredit accounts receivable
debit bad debtCredit allowance for bad debt
debit accounts receivableCredit provision for bad debts
Debit to bad debt expense, credit to allowance for doubtful accounts. The figure would be your yearly estimate.
Bad debt a/c ........Dr To Debtor a/c