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Bad debt written off in cash system of accounting

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Querist : Anonymous

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Querist : Anonymous (Querist)
04 May 2012 We are a firm following cash system of accounting.

One of our debtor is paying us Rs.40000 out of our sale of Rs.100000.He has refuse to pay the rest.What will be the entry for bad debt and what will be the closing entry for Debtors.

As per me entry would be:-
Bank a/c (Asset) 400000
Bad debt W/o a/c (expense P&L) 600000
To debtor A/c 100000

Debtor A/c 100000
To sales(income P&L) 1000000
This entry is not helping me in claiming
Rs. 60000 Bad Debt.

Please Help.

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CA Siddhartha Bhardwaj

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CA Siddhartha Bhardwaj (Expert)
11 May 2012 Entry will be as under:

Bank A/c Dr
Bad Debts A/c Dr
To Sales

So bad debts is booked as an expense and allowed as deduction while computing taxable income.
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