Final accounts
This query is : Resolved
29 August 2013
If a business already have Provision for doubtful debts 51000 and during the year business have Bad debts 10000 .
Now what to do ??
I want to know that as we make provision against doubtful debts and if bad debts occured , then wht should be done with the old provision and if we want to create a new provision then what to do ??
Give reasons ??
Now what to do ??
I want to know that as we make provision against doubtful debts and if bad debts occured , then wht should be done with the old provision and if we want to create a new provision then what to do ??
Give reasons ??
30 August 2013
I explain u with the help of entries:-
When u made entry for making provision:
Bad debts A/c Dr. 51000
To Provision for Doubtful debt 51000
When actual bad debt occured:
Provision for D.B Dr. 10000
To Debtor 10000
and if the total bad debt is only 10000 then:
Provision for D.B. Dr. 41000
To Bad debt recovered 41000
and if u think that there are still chances of bad debt then don't write back provision it will appear in liability side amounting to Rs.41000.
When u made entry for making provision:
Bad debts A/c Dr. 51000
To Provision for Doubtful debt 51000
When actual bad debt occured:
Provision for D.B Dr. 10000
To Debtor 10000
and if the total bad debt is only 10000 then:
Provision for D.B. Dr. 41000
To Bad debt recovered 41000
and if u think that there are still chances of bad debt then don't write back provision it will appear in liability side amounting to Rs.41000.
30 August 2013
but entry for provision is :-
p and L a/c dr.
to provision ??????
p and L a/c dr.
to provision ??????
05 September 2013
Both
P & L a/c dr.
To provision
and
Bad debt
To provision
are same entry the only diff is that the above entry is direct. In the second entry what will happen that the bad debt a/c will be closed by p& L a/c. Entry:
P& L Dr.
To bad Debt A/c
P & L a/c dr.
To provision
and
Bad debt
To provision
are same entry the only diff is that the above entry is direct. In the second entry what will happen that the bad debt a/c will be closed by p& L a/c. Entry:
P& L Dr.
To bad Debt A/c
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