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??