Bad debts

you need to take provision for bed debts

There are two scenarios

1. If it is 100% known that a debtor is insolvent or not able to pay the amount due, then

Bad debts(indirect expenses) a/c   Dr.      xxxxx

         Sundry Debtors a/c        Cr.                             xxxxx

2. If it is not sure about his insolvency and the situation is that u are more than not likely to receive the amount from debtors,then

Bad debts(indirect expenses) a/c   Dr.      xxxxx

       Provision for bad and doubtful debts(current liabilities) a/c Cr.   xxxxxx