BED DEBTS

PLEASE ADVISE ME WHATS THE BAD DEBTS ENTRY IN ACCOUNTS BED DABTS SHOW ON WHICH HEAD PLZ URGENT

Replies (6)

is it BAD debts or BED debts

Hello Sandeep ji,

Entry for Bad Debts:  Bad Debts A/c      Dr.

                                               To Debtors A/c

                                     (being bad debts written off) 

At the year end: P & L A/c    Dr.

                                  To Bad Debts A/c

                             (being amt. transferred)

 

Bad debts do not appear under any head as these are items of P&L A/c and not of BALANCE SHEET. If you were asking for Debtors they appear under head Current Assets, Loans & advances.

Bad debts does not cime under any head,

it is debited to P/L acc. & deducted from the debtorsamount

Originally posted by : Nitin Singhal


Hello Sandeep ji,

Entry for Bad Debts:  Bad Debts A/c      Dr.

                                               To Debtors A/c

                                     (being bad debts written off) 

At the year end: P & L A/c    Dr.

                                  To Bad Debts A/c

                             (being amt. transferred)

 

Bad debts do not appear under any head as these are items of P&L A/c and not of BALANCE SHEET. If you were asking for Debtors they appear under head Current Assets, Loans & advances.t

he is right

Bad debts is a loss for the Company therefore it is debited to P&L A\c and deducted from Debtors.

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.

:)

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