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provision for doubt ful debts?


Innocent Utsav   12 August 2019

Innocent Utsav

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what is the accounting entry for provision for doubtful debts and why is it posted in cr side of trial balance?

avater

Pankaj Sarkar   12 August 2019

Pankaj Sarkar

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provision is liability

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aditya khunteta   18 August 2019

aditya khunteta

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Hi Utsav,

Accounting entry for provision for doubtful debts will be;

       Bad debts expense/Provision for doubtful debts Dr.

       To Allowance for doubtful debts Cr.

It is a liability because the provision represents the amount that you put aside in accounts to cover a future liability. And, also as per the definition, it is a probable obligation arising out of the past events resulting into outflow of future economic benefits.

 

 

 

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sabyasachi mukherjee   16 September 2019

sabyasachi mukherjee

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Provision for doubtful debts is created as a liability upon non-realisation of money due from customer.
In case there is a bad debt .
bad debt a/c dr.
sundry debtors cr.


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