21 May 2014
DEAR SIR, my query is following -credit sale made to a debtor.being payment due from long time period ,a provision was created. later on recovered from debtor. what will be accounting enries in all such cases. what will be entry of provision reversal. will it be adjusted against our co.'s income. thanks in advance.
22 May 2014
at the time of making provision the entry must be Provision for doubt ful debts Dr (P&L) To provision for doubtful debts (grouped in customer)
now since that amount not converted in bad debts you have to reverse the same or you may pass provision for doubtful debts (grouped in customer) Dr To provision for bad debts written off (P&L)
CAclubindia
