Must to Know 😏

         Normally  we  write off  the income  that  we never going get  from debtors , as a  Bad  debts (subject  to audit  and permission of  higher authority or what  accounting  stranded suggest   )  , however some time we have write off  expenses also in following  manner  

      Write off  /  written off  expenses  is expenses  that to nullify  the amount from books of accounts    you  never  going  pay , or  creditor  never ask you to pay  , this amount is lying  in  Balance sheet   as a  creditors , can  be  written off (subject  to Audit  and  permission of  higher authority  ), as we can not  keep on carry forward many years  ,  same will  be income to us after written off . 

      For  example  we  have  received  Invoice for credit  purchase of  Goods any  other  expense   or  receipt  of  service  , we  pass  entry .

       Purchase /  Expense  A/c    Dr 

        To  Trade Creditors     A/c     Cr 

(  Booking  of  expense  entry  )  

After some  years , you realize that  creditors  never  ask you to pay or never followed   , so  you can write off  such expense by passing following  entry .

Trade creditors     A/c    Dr 

Trade  creditors  written  off   A/c  Cr 

(  creditors  written off)  

you have show Trade creditors written off  A/c  under  indirect  Income  in profit  and loss account , 

Note - In short  written off  means  to  nullify  the amount form the books of accounts , that  you never going to receive or  never  going to pay  ( subject  to  Audit  and  permission of  Higher Authority  and what  accounting standard  suggest ) 

In addition  to above ,  I would like to add  that , we can  write off  preliminary  expenses incurred  at the time of  Incorporation  of  the company , lying  in  balance sheet  can be written  off  through  " Security  premium  Account "  as per section 52 of the companies Act 2013  , another example of  written off .        

So writeoff and Written off is cancelation of books of accounts??

Crucial professional reminder regarding foreign equity compliance under Schedule FA: non-disclosure of overseas holdings (RSUs/ESOPs/ESPPs) attracts a mandatory penalty of Rs. 10 Lakh under the Black Money Act, even if all perquisite and capital gains taxes were fully paid!

Practitioners must ensure that Table A2 and Table A3 peak balances are calculated strictly on a calendar-year basis (Jan 1 to Dec 31) using the State Bank of India TT buying rate as of December 31. To automate lot-wise Rule 115 date matching and generate compliance-ready audit summaries without manual Excel work, you can search online for the ITRFA tool.

To write off is to remove an irrecoverable receivable or worthless asset by charging it to profit and loss (e.g. Bad Debts A/c Dr To Debtor A/c); 'written off' describes that amount after the entry, and for tax a bad debt is deductible only when written off as irrecoverable in the books and earlier offered as income, per Sec 36(1)(vii) and 36(2).