Assistant Manager - Accounts
1432 Points
Joined October 2009
Entry for bad debts in books :
Bad debts A/c -Dr.
To Debtors A/c
(being bad debts written off)
At the end of the year , the entry will be:
P&L A/c -Dr.
To Bad debts A/c
(being amount transferred)
Bad debts don't appear under any head as this is the item of Profit and loss A/c not Balance sheet.
bad debts are already adjusted in the net profit derived from P&L A/c which is included in the calculation of closing capital.
And debtors is shown on head "Current assets and loans & advances" on the assets side , after deducting this bad debts.
