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Bed debtos Balance in books

Sandeep Jain (Pivate) (1310 Points)

13 May 2024

Sir,

in books of account Dr. Balance of two debtors Rs. 14550/- its pending from years Can we show Under PNL a count bed debtors or adjust with Capital account.

please advise

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10 Replies

Nikhil Kaushik (Fellow CA) (85484 Points)
Replied 13 May 2024

you need to transfer the bad debts to the P&L account.

1 Like

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RAJA P M ("Do the Right Thing...!!!") (127654 Points)
Replied 13 May 2024

Yes I agreed with Mr Nikhil Kaushik Sir reply...

@ Mr Sandeep Jain,

You account/(transfer) the long pending amount in PandL account as Bad debts.

1 Like

sabyasachi mukherjee (26515 Points)
Replied 13 May 2024

No first step provision , then write off

RAJA P M ("Do the Right Thing...!!!") (127654 Points)
Replied 13 May 2024

Provisions...???!!!!!

What You mean @ Sabyasachi Mukherjee Sirrrrrrrrr...???????????????

Sandeep Jain (Pivate) (1310 Points)
Replied 13 May 2024

Mr.Mukherjee.

provison. What Provision

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sabyasachi mukherjee (26515 Points)
Replied 14 May 2024

Learn from book

Sandeep Jain (Pivate) (1310 Points)
Replied 15 May 2024

Raja Sir, & Nikhil Sir
if i show under PNL Account so can be face any query Notice from IT department in future.

Nikhil Kaushik (Fellow CA) (85484 Points)
Replied 15 May 2024

See, There is no query on write off. But you need to establish that it is a bad debt. If the amounts are large and your case is picked for assessment, AO may want to see the evidence for efforts made to recover the money.

Now, in your case, amounts are small, so I do not expect an AO to focus on it.

Sandeep Jain (Pivate) (1310 Points)
Replied 15 May 2024

Thank you very much Nikhil Sir,

RAJA P M ("Do the Right Thing...!!!") (127654 Points)
Replied 15 May 2024

Yes , I agreed with Mr Nikhil Kaushik Sir view...

And,

Note the points also, In case You received the amount in future then it will be account as Your income...
So, before account the bad debts ask again to the customer for payment.