wheather baddebts has to take under indirect expenses or provisions for baddebts
Menu
Bad debts
Replies (3)
you need to take provision for bed debts
If proision or bad debts has been created in the books of accounts, debit bad debts to prov. for b/d a/c, otherwise treat debit directly to P/L a/c.
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
Recent Topic
- Calculation of Demand due to interest u/s 220(2)
- Legal profession business code in section 44ADA
- Whether Indexed Capital Loss Can Be Claimed Under
- Form 145 and 146 Foreign Remittance in Excel Forma
- E invoice missed out/not generated for FY2025-26
- Can a broker's software legally override actual po
- Startup exit in Sept 2025: Can I still save LTCG t
- Need advice
- GST registration
- Tax Refund timeline
Related Topics
CAclubindia
