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Provision for doubtful debts
suppose balance sheet for f.y 15-16 close on Dec 2016 and debtor balance reflect Rs 100000 at the end of Dec 2016.
now when we come to the month of jan 2017, we know that rs 75000 may be bankrupt.
and in the month of feb 2017, we found that the accual bad debt held is rs 25000 only.
so pass the entry in the month of jan 2017 and feb 2017.
Replies (1)
In Jan 2017
Provision for doubtful debts dr 75000
To sundry debtors 75000
Being Provision made on debtors
In Feb 2017
Dr Bad Debts 25000
cr Provision for Doubtful debts 25000
Being Bad debts written off
Dr Sundry debtors 50000
cr provision for doubtful debts 50000
Being Provision no longer required
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