Bad debts
This query is : Resolved
RAJESH NAIR
(Querist)
12 February 2012
I want to know if a company finds its debtors turnover ratio goes up and it debtors days go beyond 90 & 120 days, what should it do?
can provide for bad debts on a presumptive basis? If so what is the criteria for the same? How to pass the necessary entries in regard to the same?
can provide for bad debts on a presumptive basis? If so what is the criteria for the same? How to pass the necessary entries in regard to the same?
12 May 2012
The company can create a provision for bad debts.
Entry will be:
P&L A/c Dr
To Provision for Bad Debts
This provision will be disallowed at the time of calculating taxable income. Only actual bad debts are allowed for tax purposes.
Entry will be:
P&L A/c Dr
To Provision for Bad Debts
This provision will be disallowed at the time of calculating taxable income. Only actual bad debts are allowed for tax purposes.
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