Final accounts
This query is : Resolved
29 August 2013
I think we made provision for doubtful debts to save the business from bad debts . But i dont know if the bad debts have occured then what help does the provision gave to the business ?
Please explain in this context the reason to make provision ???
Please explain in this context the reason to make provision ???
30 August 2013
First of all i want to make u clear that provision for doubtful debt is not made to save the business from bad debts. In accounts there is a method called prudence which means recognising all anticipated future losses immediately but ignoring anticipated profits. Provision is made for all known liabilities and losses even though the amount cannot be determined with certainty.
Even after making provision bad debt is a loss to the entity. Provisions are made just to give financial statement true and fair view.
Even after making provision bad debt is a loss to the entity. Provisions are made just to give financial statement true and fair view.
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- STCG....................................................
- Supply through E-commerce Operators
- Sales return eway bill
- TAN for Partnership
- AMOUNT RECEIVED UNDER COMPULOSRY ACQUISITION OF AGRICULTURAL LAND
- Relief u/s Section 89
- Is E Way Bill Valid If Transport ID Not Mentioned in PART A But Vehicle details mentioned in PART B
- Specified Profession
- SALE BILL AGAINST GOODS RETURN
- GST Registration Horse racing
- Plot of land. Cost of Acquisition
- Section 54F - Exemption on LTCG in 2026 for HP purchased in 2023
- Sales amount in Gstr1
- CG after sale of flat
- E Commerce GSTR1 & 3B how to file
- Nomination of Bank for refund in itr 2
- GST Cancellation without jurisdiction
- Legal Opinion on Registrar's Refusal to Investigate a Society for Non-Renewal and Non-Compliance
- GST Refund_RFD-01
- Form10BD was uploaded successfully without any Error but after 24 hours, Form10BE are not available
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
