bad debts and provision for baddebts
This query is : Resolved
harish babu
(Querist)
24 January 2009
hello everyone
what is the diffrence between baddebts and provision for bad debts and why provision for baddebts will be created and what are the relevent entries when badebts were incurred
what is the diffrence between baddebts and provision for bad debts and why provision for baddebts will be created and what are the relevent entries when badebts were incurred
CA. B.SRINIVASULU
(Expert)
26 January 2009
The confirmed loss due to non realisation of debtors is called as bad debts.
Anticipating loss but not yet confirmed that the debtor will not pay, then we will provide for provision for bad debts.
Profit and loss account Dr
To provision for bad debts
(for provision)
Bad debts
To provision for bad debts
( when loss is incurred)
Anticipating loss but not yet confirmed that the debtor will not pay, then we will provide for provision for bad debts.
Profit and loss account Dr
To provision for bad debts
(for provision)
Bad debts
To provision for bad debts
( when loss is incurred)
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