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Entry for provision for bad debts

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This query is : Resolved

Naveen Tantry (Querist)

22 April 2014 Is the below entry correct, when there is a provision created for Debtors P&L a\c......DR To Provision for Debtors (Being provision made) since Provision for Debtors is a contra asset, it will be maintained in liability side.

Ramesh

Ramesh (Expert)

22 April 2014 Dear Naveen,
Yes entry is correct and the amount is deducted from debtors in financials as below:

Trade receivables
(Unsecured considered good, unless otherwise stated)
Outstanding for a period exceeding six months from the date they are due for payment
- considered good xxx
- considered doubtful xxx
Outstanding for a period less then six months from the date they are due for payment
- considered good xxx
- considered doubtful xxx
Less: Prov. for doubtful debts xxx

Rupesh Jain

Rupesh Jain (Expert)

22 April 2014 yes reply give by Ramesh is correct

our provision you may pass to set the entry

provision for doubtful debt a/c dr.
to Debtors a/c

with amount of write off.

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