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Provision for bad debts

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Querist : Anonymous

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Querist : Anonymous (Querist)
01 April 2013 Dear sir
can any one help me. My problem is our company has decided to make 5% provision for bad debts on debtors. So what will be the entry. I think
Bad debt (ind.exp in Tally) Dr 25000
To prov. For bad debts (s.debtors in Tally) Cr 25000
Then later if we have identify the bad debt amount only 15000. Then the entry
Prov.for bad debt Dr 15000
To Bad debts Cr 15000.
Is it correct? If not please rectify my two entry's.
It is an urgent request. Thanks in advance.
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Sandip R Lathiya

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Sandip R Lathiya (Expert)
02 April 2013 Uor both entry are correct but group is provision for provision of bed debts
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Querist : Anonymous

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Querist : Anonymous (Querist)
02 April 2013 Thank you sir...
Prov. For bad debt under provision, ok. If the debtors account will decrease or not?
Regards
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Sandip R Lathiya

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Sandip R Lathiya (Expert)
05 April 2013 No.there is not disc.
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Querist : Anonymous

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Querist : Anonymous (Querist)
05 April 2013 Thank you sir.
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C A S.S.Agarwal, M.Com.,LL.B,

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C A S.S.Agarwal, M.Com.,LL.B, (Expert)
21 May 2013 But in income tax no provisions are allowed to be deducted so you have to write it off but for accounting entries it is correct
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Querist : Anonymous

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Querist : Anonymous (Querist)
21 May 2013 Thank you sir
When it will be write off. ie at the time of Year end closing?. or at the time of firs entry
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